CLOSE: XOM Put Calendar Spread

Closed the XOM May-Jul 95 Put Calendar for a credit of +1.30. The entry debit was -1.95 resulting in a net loss of -0.65.

There were 2 lessons to be learnt from this particular trade. One, never put a calendar spread with earnings due in the short month. This is actually one of my rules for a calendar spread, however, I didn’t check the earnings date before I entered this trade. Bad decision.  The other lesson I learned from this particular trade is to follow my other rule on trading which is to adjust the trade when it hits profit/loss targets, breakeven points, etc. I didn’t exit the trade when the stock price gapped outside the lower breakeven point. I hanged on to the trade hoping that it would come back. Really a stupid thing to do considering that everyone knows or ought to know that the market does what it does, irregardless of what I or anyone else think it would do.

OPEN: RTN Call Calendar Spread

Opened RTN Jun-Aug 65 Call Calendar for debit of -1.15 with 44 days to expiry for the short leg.

RTN has been trading in the 62-67 range for the past 4 months. IV is at lower quarter of the IV range for the past 8 months. There is resistance at the 67 level.

OPEN: TXN Call Calendar Spread

Opened TXN Jun-Jul 30 Call Calendar for debit of -.38 with 44 days to expiry. TXN trading @ 29.82.

TXN has been trading in the 28-31 range for the past 4 months and IV is at lower quarter of the IV range for the past 7 months. There is strong support at the 28 level.

OPEN: RUT JUN 630/640/800/810 BMIC

I opened another position on RUT. RUT JUN 630/640Put – 800/810 Call BMIC for a credit of +1.35 with 45 days to expiry.

The delta of the short 640 PUT is .09 and the delta of the short 800 call is .08. The RUT is currently approaching a strong resistance level @ 735. It will be good if RUT will respect this resistance level and stay range bound for a while. Should it break this resistance level, I will be looking at making some adjustments on the position.

15/5/08. – Moved the 630/640P leg up to 650/660P to harvest more premium. Initial credit for the 630/640P was +0.40. Bought it back for -0.50 and sold the 650/660P for +0.65. The new net credit is now +0.55. The cost basis of the new 650/660/800/810 IC is +0.72. It is currently trading at +1.40.

CLOSE: XOM Put Calendar Spread

I closed the XOM May-Jul 90 Put Calendar for a credit of +2.25. The entry debit was -1.65 resulting in a net credit of +0.60. ROR of 36.36% in 28 days. Sweet.

CLOSE: LEAP – JAN 10 VISA (V) 100 Call

Visa had a decent run up lately and I decided to harvest the profit in my LEAP position. Sold to close Visa for +16.50 credit. Original debit to open was -9.75 for a profit of +6.75. ROR of +69.23% in 8 days. Very Sweet!

OPEN: RUT JUN 600/610/790/800 BMIC

I opened RUT JUN 600/610Put – 790/800Call BMIC for a credit of $1.45 with 52 days to expiry.

The delta of the short 610 PUT is .07 and the delta of the short 790 call is .09. I opened this position after going through Dan Sheridan’s Iron Condor strategy. The shorts are about 8-9 strikes OTM.

15/5/08. – I adjusted the 600/610P to 650/660P to harvest more premium. Initial credit for the 600/610P was +0.35. Bought it back for -0.13 and sold the 650/660P for +0.65. The new net credit for the Put leg is +0.87.

I also adjusted the 790/800C to 800/810C. Initial credit for the 790/800C was +0.55. Bought it back for -1.08 and sold the 800/810C for +0.62. The new net credit for the Call leg is +0.09

The initial credit for the 600/610/790/800 IC was +0.90. The credit for the 650/600/800/810 IC is +0.98. Not much gain in the premium, however, the stock price at 736.07 was getting close to the 790/800C leg.

OPEN: LEAP – JAN 10 VISA (V) 100 Call

I’m quite bullish on VISA for the long term. I think that V could easily trade over $100 by the end of the year. I opened an OTM LEAP Jan 2010 expiry 100-strike call option on VISA @ $9.75.

This is a speculative trade, so, only have a small position. I will be writing front month call options against this LEAP to harvest more premium.

ADJUST: XOM Put Calendar Spread

Opened XOM May-Jul 95 Put Calendar to create a double calendar with the May-Jul 90 Put Calendar, which was  opened on the 9th of April.

The stock price is now close to the upper breakeven of the May-Jul 90 Calendar and required the adjustment to widen the profit zone. The new upper breakeven is now 98.74. The lower breakeven is 87.13.

OPEN: JWN Call Calendar

Opened JWN May-Jul 35 Call Calendar for debit of -1.30. IV is at lower quarter of the IV range for the past 7 months.

14/5/08. – Rolled the May 35 Call out to Jun 35 Call. Initial credit for the May 35 Call was +02.34. Bought it back for -1.45 for a net credit of +0.89. The new Jun-Jul 35 Call calendar has a cost basis of -0.41.There are 36 days to expiry for the short leg and 1 more roll to go.