Thursday, November 18, 2010

A few new trades: ZB, CSCO, KMP

I've been very passive with trading/investing lately but I'm back at it full time as of yesterday and looking forward to it. I started things off good with what turned out to be a quick trade. I shorted (1) ZB yesterday morning at 127'20 and covered in after hours at 126'22 for a gain of $933. Minimum tick is 1/32 at $31.25 so each full point is $1,000. I decided to short after seeing the largest while candle in the last three months that looked to be nothing more than a little panic flight to safety buying as equities shed 1.5% that day. I will look to enter again with a short if there is any short-term strength in bonds. Meanwhile I have been short a ZB 133 call for November which is set to expire worthless, and I'm short a Dec ZB 130 call.

I am going to spend the next few days finally rebuilding my spreadsheet I accidentally lost with all my trades going back to summer of 2008. That is the time frame I made the jump from primarily investing long-term with covered calls to different types of short-term options trades. I'm looking forward to seeing and analyzing the results.


I sold Dec 19 puts on CSCO for .39. After the recent sell off it left this stock at its lowest price since the MAR09 bottom. I'm comfortable owning this stock long-term if put to me so there is no exit point to this trade.

I was short NOV 67.50 puts that are to expire tomorrow so I rolled this trade to DEC 67.50 puts at a net of .52. With a 6.3% dividend yield I think this stock has a floor in it not too far from current price. In a world chasing yield this is a low risk stock with a long-term track record of stable and growing dividends. I am willing to own at a cost average price of $67 so there is no exit point for this trade.

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