Tuesday, February 10, 2009

Amassing Soon-To-Be-Worthless Dollars




My last trading update - Arctic Trading - was this past Thursday.

On Friday, as I mentioned in the comments of that post, I started buying the Ultrashort Real Estate ETF, again. I bought the SKF at 134.94 and 128.46.

I also whacked the NASDAQ-100 again on Friday - shorting the QQQQ at 31.46.

On Monday, as Goldman Sachs continued to squeeze me I bought even more *expensive* puts on it. I added some Feb 95 puts at 4.35 apiece.

Today, with the market dumping, I sold the GS Feb 90 puts for a loss. I was in at 5.20 (Thursday) and out at an average price of 4.35. Decay got the better of me as the stock was lower but so were my puts upon exit. This is the risk of buying *fat* front-month options.

[More - *days to expiration* dropped from 16 to 11 - so you can minimally, ceteris paribus, wipe out 27.7% of the OTM option's premium.]

And today I also dumped all of my SKF at 138.75, obviously a little too soon.

But I'm still plenty short as it stands.

I've still got EEV, SRS, SDS, and that short QQQQ position.

[And I've still got TBT, OIH, DXO, a smidge of DELL, and a smidge of GOOG.]

5 comments:

Funny Circus Bears said...

Premium decay can be a b*tch!

SirPadgett said...

Keep your shorts on.

Anonymous said...

I always wanted to wall paper my walls with Benjamins...
Kfell

west coast tom. said...

A girl I dated had *ruble* wallpaper. This was in Concord, MA.

Do you always buy the front month contracts?

CaptiousNut said...

I buy all months - always have. For example, remember my FED puts?