Wednesday, November 16, 2011

New Trade - Short VALE Dec 21 PUTS

Continuing my recent them of doing short puts on companies I have owned and liked in the past at higher prices, sold the Dec 21 puts on VALE today for $0.22. I like the chart showing that this was near the low of the past 9 months.


  1. Trade Update: Added to this position today - sold 20 puts for $0.30 and 20 more for $0.32 to try to take advantage of yesterday's move down which was still present in this stock this morning. The total position then is short 60 Dec 21 puts - buying power effect as of now is about $18,800 and the goal will be to collect $1680 if these expire worthless. Current probability that they expire worthless is 84%. That works out to about a 9% return on a 1 month trade that has a high probability of success, hopefully it works out.

  2. Trade Update: VALE has come down quite a bit since this position was initiated, stock price now $22.66 down from $24.80 just a week ago. Position currently showing a loss of $1500 and probability of expiring has dropped from 84% to 69%. Still comfortable with the position but will need monitor and possibly adjust if the markets continue to slide.

  3. End of month update: Have not done anything with this position. Currently showing a profit of $208 with probability of expiring 81%.