Monday, January 10, 2011

(KMP) Put Close Out

I was short the JAN 67.50 puts at .70 and just closed them out for .10. I could lock in (.60/.70) = 85% of the profits with two weeks left until expiration so I felt this was the prudent move to make. Besides locking in profits and taking 100% of future risk off the books, I'm hoping for a pull back within this 3-month trading range so I can sell FEB 67.50 puts. If this happens its essentially a roll of the trade. Current price for FEB 67.50 puts is roughly .50. So we'll see if I get a chance for a better entry sometime in the next two weeks before JAN expiration.


  1. I like the new mingset on booking profits. In the past you would be talking yourself out of not closing the position because you were leaving 15% on the table...but now you are talking about how much of the total you are booking.

  2. Interesting for sure, nothing has changed other than my perception.

  3. Jason, Do you have a particular watchlist, Sector, or Industry Group that you trade? How do you go about finding your particular trade candidates?

  4. Hi Darrin, sorry for the late response. I was in the mountains and didn't have Internet access for a few days. I do have a watch list of sorts but the ticker symbols on it change all the time. They are mostly things I've traded in the past and thus am familiar with their charts. I do not watch individual sectors or industries.

    The question about finding trade candidates is a good one. I often ask myself that, I don't have a particular formula. It's kind of an amalgamation of scouring websites, blogs, TV, Twitter, and charts from my watch list, etc. I often find other people's trade ideas and I analyze them from my perspective. I rarely use their exact trade but rather end up finding another angle to play it that I like better. I hope this helps, let me know if you have any more questions.