Also, I am now doing trades within 2% of my total portfolio size. I moved up from 1% from last month since I had several winnings trades. This is a great discipline strategy to employ when you've had some losers and/or you are starting to get emotional about your trading. If you are experiencing any one or two of these issues, then minimize your risk by sizing small 1% or less of your total portfolio until you have a string of winners and are less emotional about your trades.
LVS Put Calendar:
Sold April 85 for $11.75 and bought the Jun 85 put for $14.45. My total debit on this trade was $2.70.
This gives me a yield of 11.75/14.45= 81% in 1 month
I will roll the short leg to May once the stock gets close again to the middle of the trading range at 85.
TGT Double Put Calendar:
The chart is neutral to bearish currently with consolidation around 52.50. I put on a double calendar at 47.5 to hedge myself in case this breaks downward out of my trading range on the 52.50 calendar. Looking at the probabilities, this allows me to make my money within the first few days instead of having to wait about a week to start profiting. This is my first double calendar so we'll see how it all works out.
Bought Jul 47.5 put for $4.10
Sold Apr 47.5 put for $1.80 for a net debit of $2.30
Bought Jul 52.5 put for $6.50
Sold Apr 52.5 put for $4.15 for a net debit of $2.35
So this gives me a yield of: credit (1.80+4.15)/debit (4.10+6.50)= 5.95/10.60= 56% in 1 month
POT BLPS:
With a perfect bullish engulfing candle and a bounce up off the 30 day moving average today, I got filled on a bull put spread. Next earnings announcement isn't until 4/21/08 so I have time to get out before that volatility craziness.
Sold April 135 put for $4.00
Bought Apr 130 put for $2.93 for a net credit of $1.07
Risk is 5.00-1.07=3.93 (position sized according to risk)
Net yield is 1.07/3.93= 27.2% in a few weeks
As long as the stock stays above 135, I'm good to stay in and let this one expire, or choose to close out whenever I want.
USO Time Diagonal:
So the time diagonal is kind of like a vulture but with a little more time on the long side.
Oil companies have been kicking a lot of butt lately as is evident with the cost at the pump!
USO ranks as one of the top companies in the oil industry with a nice break through resistance recently around $77.50. Now it's at it's 2 year high.
What we are doing is actually a counter-trend trade. WARNING: not for beginners or for those risking a huge pot!
Despite the trend of the stock (bullish), we looked at the MACD on this one (although it is a momentum indicator, we normally don't use this indicator because it's slow), and noticed that the MACD has a bearish trend right now-signaling to us that this baby may run out of steam. (look at the trend lines I drew on MACD). Also, volatility is jumping up which means there is a sense of fear here among investors (what goes up must come down).
So we Bought the Apr 91 Call for $2.50and Sold Mar 90 Call for $0.82 giving a total debit of $1.68.
0.82/2.50= 32.8% yield in 1 week. We will roll the Mar to Apr to close out or possibly convert this to a calendar by rolling the long further out in time and rolling the short to April if this starts creating a channel. Or if it still trends, but downward, then we will convert this to another BRCS.
This trade is sized for maxed loss.
SHLD Put Diagonal:
Sold Apr 85 put for $3.00
Bought Jun 105 put for $19.55 for a net debit of $ 16.55.
3.00/19.55= 15.3% yield in 1 month
