AJ

Profit + $145

I decided to close this position towards the end of the day, since I feel we might have a bounce tomorrow and the VIX could fall down.

Labels: Profit, VIX

Profit +120

I'm seeing resistance around the 72 area and it looks to me that it is overbought. I decided to take profits on it.

Labels: Profit, RIMM

Profit +170

Put in a mental stop loss if it went below 88, which it did.

Labels: GLD, Naked Put Selling, Profit

Profit +90

Blah.. was hoping/expecting to make more on this trade. I closed it ahead of the MTM decision. If the market rallies on that news, then FAZ could take a big hit. Just trying to play it safe.

Labels: FAZ, Profit

Profit +$115

I decided to take profits on this one. I'm not sure which way the market is headed.

Labels: Profit, X

Profit + $225

Oil has had a good run the past few weeks. Locked in my profits on this one.

One thing I've realized selling naked puts is to take profits when you've already made 75-80% on the trade. If you try to squeeze out the extra bit of profits in this kind of a trade, it could backfire in your face. It doesn't take much time for options these days to go right back in the money.

Labels: Profit, USO

Profit + $211

I decided to take profits on this one. I put in a tight stop intra-day and it got hit. Everything just looks so overbought, and I wanted to protect my profits on this one.

Labels: Profit, RIMM

Bought this one back for 5 cents. Although it expired worthless towards the end of the day, I decided to cover it in the middle of the day due to the high volatility in the markets.

Labels: LVS, Profit

Damn this one was a tough one to hold. Decided to close it a little early, as it can move 20-30 dollars in a heartbeat. Might talk more about this over the weekend.

Still holding onto the LVS naked put. Not sure what I'll be doing with it though.

Labels: Profit, SKF

The past few months have been tough when it comes to trading... trading options more so. The market is just too volatile and can be dangerous when you're buying calls and puts, since you could lose a lot of money in time premium.

I decided to try out a few other option strategies, I'll talk about one of them - Naked Put Selling. You can find some information on this strategy here.

Unlike the call and put buying strategies, where the maximum money you can lose is the premium you pay for the options, in this strategy, the losses can be very large if you're not careful. But the beauty of this strategy, and I guess any strategy that involves selling options, you can still make money, even if you're slightly wrong with predicting the direction of the stock. This was the case with my first trade using this strategy, the profits weren't huge (and in general the profits won't be as big with selling options than with buying options), but it was definitely fulfilling.

This trade wasn't perfect or even close to it, but I'm hoping to refine my entry as I place more trades. After GRMN announced their results, the stock took a beating. It was already down 13-14% and I thought the downside was limited and also since the move was so quick, I felt the option premiums might be the highest around that time. So instead of buying a call, I decided to sell a put. I sold 2 Aug 35 puts @ 0.70 each (the stock was a little above 39 at that time), thinking that GRMN won't go down that far. But I was wrong :) At one time it went below 34 and I was getting ready to close at least one position, but since there was some time premium still left on it, I decided to hold on and sell maybe after a good bounce. I was lucky enough to get that bounce and the option premium started falling. At one time I could have covered it when the premium went to 0.05, but I didn't, which could've been dangerous, since the stock fell down hard once again. I'll remember to close early the next time and not let a profit turn into a loss in order to get the last few pennies.

I like this strategy, since it makes you identify the support areas and if those areas are strong enough, you can sell a put below these areas. This is a good strategy for long term investors as well, since instead of buying stocks right away, you can sell a put below the price it is right now, and if the strike price gets hit at expiration, the investor buys the stock at lower price and keeps the premium, but if the strike price does not get hit, the investor keeps the premium. There are obviously huge risks involved with this strategy, so be warned.

Disclaimer: I've described this strategy for general informational purposes only. My opinions do not constitute a recommendation to buy or sell any securities and should not be considered as investment advice.

Labels: Naked Put Selling, Profit

My exit on this wasn't all that great. I sold it in the morning, after seeing a lot of volatility. But after looking at the closing price, I'm not complaining.

Labels: Profit, X

One more thing I need to remember is to get rid of options early on in the trading day. Option premiums are usually high at that time. I got stopped out of this position mid-morning. Saw this option going all the way to 16.50 (Damn). It did close below my selling point, so can't complain a whole lot.

Short term bottom in the market perhaps?

Labels: Profit, RIMM

Sold this when the market looked like it was reversing in the afternoon. But it went down after that. Oh well...

Labels: GS, Profit

GS has found support/resistance at the 215 level many times before. Today was no different. It tagged 215 today and moved down the rest of the day. Unfortunately I wasn't at my desk most of the day, otherwise I would have closed it much earlier. Anyway, got out of this after I felt that the market looked like it was headed lower.

Labels: GS, Profit

Sold this around 125. It was trading in a range, with 125 being resistance. The market was also showing some weakness during this time.

Labels: POT, Profit

Sold this after it bounced off of support at 105. It weakened in the afternoon though and is currently below 105. If the market weakens further, this could easily see 100.

Labels: Profit, RIMM

Ignorance is bliss! I had no idea that SHLD was reporting today, otherwise I might not have even taken this trade. I was thinking of closing it yesterday, good thing I decided not to.
Closed this a little after the open. Some thing that I've realized trading big earnings based moves is to get rid of options at the beginning of the day, that's when the premiums are usually the highest.

As a side note, I bought this put option @ 3.00 when the stock was trading at around 111. Now it's at 104 and the option is still selling for only 3.00. Goes to show what an IV drop can do to an option price.

Labels: Profit, shld

Sold this one, but shorted a few shares a little above 60.

Labels: LEH, Profit

Got stopped out in the morning. Had I held on to it a little while longer, could've had a pretty nice profit. Coulda woulda shoulda..

Labels: AAPL, Profit

I traded POT today, bought one option mid-afternoon, sold it towards the end of the day. I'm still cautious with the current market so didn't want to hold it overnight. One thing I liked about this trade was that my bid was matched and so was my ask. Usually it happens the other way around for me. So at least I was able to make money off of the spread... which usually for these options could be around 50 bucks.
I bought this for 9.40, sold for 10.40.



POT still looks to be consolidating the huge move it made a few days ago. This could break out above 124.

Labels: POT, Profit