Sold 1 XLF Jun08 33 put for $5.90

I bought this put on 3/26 for $7.40.  My original exit level for a loss was set to $27.80, but I had lowered it to $27.15 as the resistance level went lower.  Today it crossed up above that and triggered my exit order.

This position was up to $120 profitable at one point, but the recent upturn in the market cause this ETF to also go back up.  There wasn’t anything I can see that I should have done differently on this trade.

Week ending 4/25/2008

Only one word to describe this week: Ouch! Most of my positions closed for a loss, including a new one that I opened this week on MER. Since last Wednesday when my account peaked at over $12,700, I’ve lost about $1200.

This week, my account went down $625.03 to a new total of $11,542.03. This was by far my worst week ever. I also had my worst ever day with a $494 loss on Thursday.

Other than the mistake I made in not getting out of TRN when I saw the new support level, I don’t think I made any bad trades. I just got hurt by the sudden upsurge in the market when I was holding all puts.

It is rather disappointing to lose 2-3 months of profits in one and half weeks. On the other hand, it’s good to know that with all of my trades going against me, I still only took less than a 10% hit on my portfolio. So at the very least, my risk management and money management rules are working for me.

Sold 1 TRN Jul08 35 put for $5.60

I bought this put on 4/4 for $8.60.  It went up as high as $10.50 before the stock started to shoot up and finally broke through my loss exit level of $28.75 today.  The stock actually traded as high as $29.58 today.

The unfortunate thing about this trade is that I had recognized that there was a potential support level at around $23.75, but decided to leave my original exit orders in place.  It turns out that was about a $500 mistake.

Sold 1 MER Jul08 55 put for $7.75

I bought this put on 4/22 for $9.80.  The put was actually doing nicely as of yesterday, but today the stock surged up over $4.00 at one point.  It reached a high of $49.24, which took out my loss exit level of $48.70.

 

Bought 1 MER Jul08 55 put for $9.80

This stock has been in a downtrend since last May, and I traded an earlier bounce off a resistance level earlier this year.  Since then, it has broken the trendline it was using as support, and is now using that line as a resistance level.

The stock has come up to this line again and bounced down, with confirmation from the MACD and stochastics.  The stock actually closed the day up $0.09, but it was down by about $0.10 when I entered the position.

The stock is currently at $46.50.  Support is around $38.15 and resistance is around $47.25.

My exit orders are:

• Market order to exit if the stock trades above $48.70
• $0.10 trailing stop loss if the stock trades below $39.30
• Stop loss on the option at $4.50

 

Sold 1 ADI Jun08 35 put for $3.50

This trade actually happened yesterday.

I bought this put on 4/8 for $5.40.  My exit price for a loss was set to $32.15.  Yesterday, the stock went up as high as $32.73 and took out my exit order.  It has sinced bounced back down off the higher resistance level, but I was trying to trade the earlier bounce which did not pan out.

 

Sold 1 WSM Aug08 35 put for $7.70

This trade actually happened yesterday.

I bought this put on 4/7 for $9.50.  My exit price for a loss was set to $27.75, which the stock took out yesterday.  It turns out that since I was using the 200-day moving average as the exit point, I should have set my exit a little bit higher.  Today, the stock fell back down by over a dollar.

 

Week ending 4/18/2008

I was travelling last week and wasn’t able to write this post until now.

Last week, my portfolio reached a new daily high of over $12,700, but the markets made a strong move up on Friday and my portfolio of puts fell as a result.  I ended the week down $300.52 to $12,167.06.

Sold 1 ADM Jun08 35 call for $10.90

I bought this call on 3/25 for $8.80.  My original exit price was $48.50 based on the uptrending resistance level I had identified originally.  However, I later saw that the stock had also encountered a horizontal resistance level around $47, so I lowered my profit target to 3% below that, which was $45.80.  Today, the stock crossed above that and triggered my exit order.

I had originally intended to test out my plan of selling the at-the-money call the day before earnings with this position, but I think I prefer just getting out with a profit.  I do have another position, TRN, which has earnings coming out soon, so I may end up testing it out on that instead.

Sold 1 BCSI Jul08 30 put for $10.80

I bought this put on 3/27 for $8.20.

My original profit target based on the supporting trendline I had drawn was to get out if the stock traded below $18.75.  However, after the stock dropped as low as $19.19 on 4/4 and then started to recover, I noticed that there was actually a much stronger supporting trendline slightly higher up (see updated figure below). 

I updated my proft target to $19.25, but at that point I figured I had missed my chance to exit profitably because it had already made that move and was starting to move back up.  Luckily, the market gave me a second chance today when the stock went down as low as $19.24 and I was able to get out today for only about $20 less than I would have if I had exited on 4/4.  One thing I am happy about is that I didn’t panic and sell manually when the stock had gone up a bit last week.

Another positive thing is that I went back and reviewed the trendlines on my other positions and found that a couple of those needed to be updated too.  Luckly, I found those before I missed a potential profitable exit opportunity.