August 2011 Expiration
August Expiration’s commentary on Wins and Losses:
After numerous requests, we have resumed our comentary on our wins and losses for the previous month’s expiration.
This was a challenging month to say the least, with wild swings up and down. Many of our contingent orders were triggered. However, we ended this month with some good gains:
CLF:
The entire trade was a drag on our portfolio! We ended the last session with a significant gain on the 70-75 put spread. However, we went in for what looked like another winner on the 90-80 put spread, but got whacked by the market girations. We felt every market bump with this trade and we had some serious ground to make up on our other positions! In hindsight, we were a little upset that we didn’t hold the 80 puts a little longer, but we were just trying to mitigate a loss, and no one could have imagined the market would fall so far. Most of us were assigned stock at $90, which we in-turn exercised our option contracts to get out of the stock to end the pain.
CMI:
Another drag on our positions came in the form of this CMI position! This security shot up unexpectedly before the market turmoil, and we expected it to remain higher. Then the sideshow bobs and crusty the clowns in washington caused the underlying position to track back much futher than any of the company’s issues supported, and the security tanked. We did make up some ground with the 87.5 puts, by closing out at a significant gain, but we were just shy of breakeven. We were also assigned on the 97.5 puts and turned arround and sold the position for $95.00.
DECK:
This was a gift! The put rose to such a level, that we could not resist taking profits on this position. There is no reason for the underlying security to be down, other than by association with the entire market, so with all the irrational movements, we felt it best to close this position at this time. We will need to make this up with the put spread this month, but we could not resist taking profits.
MCP:
Another gift! MCP was artificially depressed, and the calls reduced to a level that we were comfortable taking profits. No use tying up capital on a position which has little left to gain! This trade added a little more to our gains for the month.
That’s all the commentary for now, till next month’s expiration! With all the market turmoil, this was still an excellent month!
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