It is very difficult for me to stay out of the market. As I just wrote my last post I said that I would be pretty inactive with positions for the next few months. But then I put on a position in USO and DRYS. Let me explain.
1) I sold 10 short $7.50 puts on DRYS with Jun 09 expiry for $0.55. Break even on this is $6.95. I put this position on because looking at the Dry Baltic index it is up over 400% from its December low of 666. The outlook for the dry shippers is much better. I basically saw DRYS on my watchlist was down on today and this signaled a good opportunity to put this trade on.
2) I also sold 10 short $34 puts on USO for $0.35 a contract at Jun 09 expiry. Oil is strong and I don't see that chaning going into summer and hurricane season. USO is currently trading at $37.30. Working in the oil industry I need to have a least one position tied to oil right?
I continue to look for my play on Silver, but I would like to see a pull back.
Until next time.
I bought back my $33 naked puts on USO for a nickle that I sold for $.35. I guess I did not update this when I put on the position. Oil pulled back after I sold my $34 puts and I was able to sell the $33 for just as much so I did. I am only buying back, because once my options trade down to a nickle I like to close them to get out of any risk and just secure profits. Its just a goofy thing I do. But it is a nice gain of 85.7%
ReplyDeleteI do this often as well. Then I like to kick myself in the ass as they expire worthless and I realize I left money on the table. But I use the same philosophy, if you can book a large percentage of the possible gaines and take 100% of the risk off the table, why not. Taking the risk to 0 also takes any related stress to 0 for me. And more importantly it leaves you able to jump on the next play psychologically and financially.
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