Week ending 2/29/2008

I had another small loss this week.  My portfolio went down $74.50 to a total of $11,793.62.  Today was kind of disappointing because I started the day with 4 puts, the Dow went down over 300 points, and yet I finished the day with a $5.00 loss.  This was because AKAM shot up over $2.50 during intraday trading and stopped me out for a loss, and I exited my other two positions early in the morning before they had made their full move down.

I’ve been getting a little bit sloppy on my exits and need to be more careful.  I think I did OK on getting out of FITB when I did because it was showing a bullish signal and was likely to rise up from where it was.  But this is a general issue for me work on.

I’ve also been a bit lazy the past couple of weeks and I think it has definitely impacted my results.  I haven’t updated my watchlists the past two weekends, which means I am potentially missing out on some trade opportunities that would have given me big gains on a day like today.  I need to be more diligent about this and not let my watchlists get stale, even when I am busy with other things.

Sold 1 AKAM May08 40 put for $6.30

I bought this put on 2/19 for $8.20.  My exit level for a loss was set at $35.25 on the stock, and today the stock shot up as high as $36.00.  I was stopped out for a loss of $190.  It was odd that the stock went up so much on a day when the Dow was down over 300 points, but so it goes.

Edit: It turns out that Akamai won a patent lawsuit today so that explains the big jump.  It’s unfortunate, but there’s absolutely nothing you can do about news events like this other than putting your stop losses in and letting them protect you from big losses.

Sold 1 FITB May08 35 put for $11.80

I bought this put on 2/4 for $8.40.  My profit target was to get to $23.00.  Today I saw the stock trading around $23.40 and was trying to decide whether I should get out or hold on.  Then I noticed that the stock has formed a falling wedge since the last bounce, which is usually a bullish pattern.  So I figured that it was more likely to break out to the upside of the wedge and went ahead and got out for a decent profit.  As it turns out, the stock did fall to below $23.00, so I left about $30-$40 on the table by getting out early, but I think given the presence of a bullish indicator, I probably made the right choice.

Sold 1 DRE Mar08 30 put for $6.50

I bought this put on 1/31 for $6.80.  Since then, it pretty much just went sideways for a month.  It had actually gone above its resistance level a bit in the last week, but came back down to it today.  It’s within 3 weeks of expiration now, and I figured that if it hasn’t made the move I was looking for in a month, it’s time to get out.  I took a $30 dollar loss on this position, but I look at it as pretty much breaking even.

My other reason for wanting to get out now and not wait for expiration is that the option I was holding had become very illiquid.  When I got in, there was well over 100 open interest, but the number fell to about 30.  When I entered the trade, the bid/ask spread was about $0.60 wide, but I managed to shave a bit off of my entry price.  However, I wasn’t able to get even a dime above the bid when exiting it today, presumably due to the lack of liquidity.

Week ending 2/22/2008

This week ended up mostly flat.  My portfolio went down by $16.03 to a total of $11,868.12.  Not a very exciting week overall.  I closed one trade for a loss and one for a profit, with the two trades nearly offsetting each other.  Three out of my four positions are pretty much at break even right now.  Today looked like it was going to be a good day, and my account was up over $100 an hour before the close, but there was a big surge in the market 30 minutes before the close and my account ended up in the red for the day and week.  All of my positions still look good, and the only one that is even close to its resistance level is DRE.

Bought 1 EYE Apr08 30 put for $7.20

The stock has been in a downtrend since July 2006, and it has been on an even steeper descent since June 2007.  It broke down below its old support level in November, and it has now come up and bounced down off both the steeper resistance trendline, and the old support trendline.  There is also confirmation from the MACD and stochastics.

The stock is currently at $22.85, though I got in when it was at $23.00.  Support is currently around $17.65, and resistance is around $23.90.

My exit orders are:

• Market order to exit if the stock trades above $24.60
• Trailing stop loss if the stock trades below $19.00
• Stop loss on the option at $3.50

Bought 1 AKAM May08 40 put for $8.20

The stock has been in a downtrend since last February, with a slightly steeper descent since August.  It has come up to its resistance trendline and bounced down, and also has confirmation from the MACD and stochastics.

I really should have entered this position on 2/14, which is the first time it bounced down off the trendline.  However, at the time the trendline was drawn slightly higher and I decided to not get in.  Today the stock moved down $1.14, so I’m getting in at a higher price on the put than I would have otherwise, but it looks to still be a good trade.

The stock is currently at $32.63.  Resistance is around $34.25, and support is around $25.60.

My exit orders are:

• Market order to exit if the stock trades above $35.25.
• Trailing stop loss if the stock trades below $26.50.
• Stop loss on the option at $4.00.

Sold 1 USG May08 42.5 put for $9.20

I bought this put on 2/5 for $7.00.  My profit target was to get out when the stock reached $33.50.  I was a little bit on edge about this position in the last couple of trading days because it got down to $33.56 on Friday, and today it went down to $33.54 before heading back up.  Finally when it was back down around $33.60, I decided to get out manually.  And just as you would expect, 5 minutes later the stock was down at $33.37.

As it turns out, I would have gotten pretty much the same exit if I had left the order alone.  However, I’m a little unhappy about not knowing what to do when a stock is very close to its profit target.  I’ll have to give this more thought.

Sold 1 TDW Apr08 60 put for $6.10

I bought this put on 2/12 for $8.80.  Since then, the stock was basically hovering around its resistance level, until today when it gapped up at the open.  It cross above my exit point of $55.00 early in the day and I got stopped out.  The stock went as high as $55.52, but ended up closing at $54.54.

The one thing that makes me think I could have avoided this trade is that the confirmation from the MACD and stochastics was a bit weak.  They were both turning down, but they were actually already down quite a bit from their recent highs.  From now on, I think I’ll stick to trades that show a clean confirmation.

Week ending 2/15/2008

The market was fairly strong this week, so my puts were down a bit.  I liked the balance I had a couple months ago when I had a mix of calls and puts, but I just haven’t seen a buy signal on a call in a long time.  Right now, my watchlist of downtrending stocks has over 100 stocks in it, and my watchlist of uptrending stocks has less than 20.

I think all of my positions are still doing OK.  The put on TDW went negative immediately after I purchased it, but it still has not broken its resistance line.  DRE is pretty much at break even, though for some reason the open interest on the option has dropped dramatically, and now the bid/ask spread is even wider than when I purchased it.  It’s going to be a challenge to get out of that one with any kind of reasonable profit.  My positions on FITB and USG are doing quite well.  One unfortunate thing with USG is that today it came with $0.06 of my profit target, then backed off and is now about $0.60 away.  Hopefully it will keep moving down on Tuesday (Monday is a holiday) and get sold for a profit.

This week my portfolio went down $234.53 for a total value of $11,884.15.