ADJUST: GS Naked Put

On 5/8/08, I opened the 8 GS Naked Jun 175 puts for credit of $5.00.

This trade has been going against me for some time and I did not adjust it earlier. So this is mess up #1 on this trade (not taking action sooner).

Mess up #2 is here with me accidentally buying calls instead of selling them to neutralize my trade. I thank the market for blessing me with a small profit with my screw up though. Next time, I may not be so lucky if I mess up so I am not going to bank on it happening again. Below I immediately sold the calls I bought to get back to just the naked puts. Rule #1 in trading-if you make a mistake, don't try to salvage it...GET OUT as soon as possible.

BOT +16 GS 100 JUN 08 175 CALL @3.25 debit
SOLD -16 GS 100 JUN 08 175 CALL @3.37 credit

Now I sold the correct calls as follows:
SOLD -16 GS 100 JUN 08 175 CALL @ $3.55 credit

Here's what it did to the greeks on my trade. Below is a screen shot of the analysis of just the naked puts I was in. Notice how the trade is currently in the non-profitable zone at 168.40 (just left of my breakeven).


Now, by adding the 16 short calls, my delta is almost completely neutral and I have increased my theta and vega to beef up my short side. Also, I am now between my breakevens at 168.22 and profitable instead of at a loss. Once the stock starts heading upward again above 175, I can either remove the short calls or exit the trade.



I will be looking to close this trade within the next week as we are approaching June's expiration.

CLOSE: POT Naked Put Jun 195 +19%

On 5/22/08, I opened the naked put on POT:
SOLD POT 100 JUN 08 195 PUT @ $8.50 credit
Exit naked put at 80% profit at $1.70 debit.
Stop loss set to twice credit at $17.00 debit.
My risk was $35.87 margin held.

Today my exit order was triggered at:
BOT POT JUN 08 195 PUT @1.70 debit

8.50-1.70/35.87= 19% ROI in 14 days

CLOSE: UNG Naked Put +10.1%

On 5/22/08 I entered the trade as follows:
SOLD UNG JUN 08 52 PUT @ $0.92 credit
Exit order set at 80% profit at $0.18 debit.
Stop loss set to twice credit at $1.84 debit.

Today my exit order was triggered:
BOT UNG 100 JUN 08 52 PUT @ $0.20 debit

0.92-0.20/7.15 margin risk= 10.1% ROI in 13 days

CLOSE: UPL Naked Put +21.9%

On 5/15/08 I SOLD JUN 80 PUT @ $2.80 credit
Risk= $10.26 margin held
My exit order was set for $0.56 (80% of my credit)
Set my stop loss for twice the credit at $5.60.

Today my exit order was triggered at:
BOT +16 UPL 100 JUN 08 80 PUT @ $0.55 debit

2.80-0.55/10.26 margin= 21.9% in 18 days

CLOSE: AAPL Naked Put Jun 170 +8.3%

On 5/8/08 Naked Put: SOLD AAPL JUN 08 170 PUT @ $4.00 credit
My margin risk was $22.61.

Today, my exit order triggered early because of the same issue with RIMM. I did a cancel/replace to correct the decimal error-but then it triggered. At least it got me out for a profit! I learned my lesson though that it is crucial to double check your waiting orders very carefully. One decimal place can make a HUGE difference!

BOT AAPL JUN 08 170 PUT @ $2.11 debit

4.00-2.11/22.61= 8.3% in 21 days

CLOSE: RIMM Naked Put Jun 130 +8.8%

On 5/15/08 I entered the trade as follows:
Opened this naked put on RIMM at Jun 130 puts for a credit of $3.87 this morning.
$20.86 margin risk
I set my stop loss for twice the credit at $7.74 per contract.

Today my exit order was off by one decimal so I did a cancel/replace order to correct it to be at $ 0.77. Unfortunately, it triggered early somehow, but I still exited for a profit.

BOT RIMM 100 JUN 08 130 PUT @ $2.04 debit

3.87-2.04/20.86= 8.8% in 14 days

CLOSE: DBC Naked Put Jun 38 +10.2%

On 5/15/08 I opened: SOLD JUN 38 PUT @ $0.85 credit
Set stop loss for twice my credit= $1.70
My risk was the $6.08 margin.

Today my exit order was triggered as follows:
BOT DBC JUN 08 38 PUT @ $0.23 debit

0.85-0.23/6.08= 10.2% in 14 days

CLOSE: POT Naked Put Jun 170 +22.4%

On 5/8/08 I sold the Naked Put: Jun 170 put for credit of $4.80. My risk was the margin held at $17.00.

Today my exit order (at 80% of my credit) was triggered at:
BOT POT JUN 08 170 PUT @ $0.98 debit

4.80-.98/17.00= 22.4% ROI in 21 days

OPEN: POT, UNG, V

POT:
SOLD -12 POT 100 JUN 08 195 PUT @ $8.50 credit
Exit naked put at 80% profit at $1.70 debit.
Stop loss set to twice credit at $17.00 debit.

UNG:
Naked Put: SOLD UNG JUN 08 52 PUT @ $0.92 credit
Exit naked put at 80% profit at $0.18 debit.
Stop loss set to twice credit at $1.84 debit.

Bull Put Spread: SOLD VERTICAL UNG JUN 08 53/51 PUT @ $0.55 credit
.55/risk of 2-.55= 37.9% profit potential.
Sized for max loss-no stop set.

V:
Double Calendar:
BOT CALENDAR V JUL 08/JUN 08 75 PUT @1.30 debit
BOT CALENDAR V JUL 08/JUN 08 80 PUT @1.20 debit
Total cost basis= $2.50

OPEN: UPL Jun 80 Naked Put

Here's another naked put from our meeting...

SOLD JUN 80 PUT @ $2.80 credit

Risk= $10.26 margin held

Set my stop loss for twice the credit at $5.60.

Also set my exit order GTC for $0.55 (80% of my credit).

OPEN: DBC Jun 38 Naked Put

One of our trade group members brought up this stock. DBC has had a steady uptrend since September 2007. It has currently reached it's all-time high at 40 with a little consolidation over the last few days. When we looked it last night the credit was worth about $0.65.

However Mojo from insanemoney.com suggested we place a fill order at $0.80 or 0.85 to see if it fills as this may retrace slightly to test the moving averages as it continues to make it's way upward. As he predicted, that's what happened later on this morning, so I got filled as below....

SOLD JUN 38 PUT @ $0.85 credit

Set stop loss for twice my credit= $1.70

My risk is $6.08 margin held. I will exit at 80% of value of credit (around $0.17 debit to exit)

OPEN: RIMM Jun 130 Naked Put

Opened this naked put on RIMM at Jun 130 puts for a credit of $3.87 this morning.

387 credit /2251 margin risk= 17.2% profit potential

I set my stop loss for twice the credit at $7.74 per contract.

OPEN: DVN, POT, AAPL, GS, IBM, LFC

Today I placed several trades with my trade group:

DVN Iron Butterfly (post earnings)
Jun 115 call
Jun 130 call
Jun 120 put
Total credit= $11.50
Exit on volatility crush

POT Naked Put
Jun 170 put for credit of $4.80

AAPL Naked Put
Jun 170 put for credit of $4.00

GS Naked Put
Jun 175 put for credit of $5.00

IBM Long Call
Jun 125 Call for debit of $3.40
No stop loss but sized for maximum loss

LFC Bull Put Spread
Jun 57.5/55 puts for credit of $0.62