Commentary
Fourth day in a row for the market to be down. We're down a skosh as well.
<sigh> While there is some negative news out there, there always is! Oil,
Iran, Nigeria, Dallas (Dallas? Yeh, some refinery fire or sumpn.) The point
is that so long as there are naysayers out there hawking a major correction,
their rhetoric's gotta depress traders, which will affect the market to the
downside.
But fundamentally, the economy still seems to be holding up; not like the
go-go nineties of course, but sufficiently for all of us to make $$$ if we
keep our discipline and our heads. So even if we have the self-fulfilling
prophecy of a downward correction, it's got to be a short one, doesn't it?
Anybody? ANYBODY? ANYBODY?
Paper Profits Table
Yeh, the NLV Portfolio is slightly down again, today but we're still
managing to skunk the benchmark S&P. The vagaries of trading, being what
they are, could still reverse the tables (no pun intended) on us. After all
there still are 10 more months before year's end. But each day that goes by
tends to settle the returns into a smaller range. I won't explain the math
reasons on this unless you send me an email asking. Just trust me.
Mathematically, we won't see a real settling down until at least the end of
March. But if there's a big news event lurking out there, even if it were
December 31st, look out. There's no sure thing happening until the fat
trader sings. (Hey, don't look at me. Mednick don't sing and Charley don't
surf!)
Meanwhile, at the NLV's current rate of return, our portfolio would double
by September 2010. Sure beats the banks' 5% return which guarantees a
doubling of your savings account by January 2021! (And yeh, we could lose
everything by tomorrow but we'd still have 13 years and 11 months to make it
back. <g>)
Closed Transactions Table
It's tough to close winning positions when the market is gloomy so no closes
today. I'm only happy that I got to dump some of my winners last week before
they turned to losers today. <happy, happy, happy>
Put Trading Activity for Today
Generally, we want STO Premiums to be as big as possible and we was BTC
Premiums to be as small as possible. This would give us
optimum profits. In other words, we want to buy low and sell high, but with
put writing its always in reverse order. Note that all Premium, STO, and
Profit/Loss Columns should be multiplied by 100 to get the per contract
numbers and that all positions we enter into will always be for as least two
but probably more contracts per position.
Abbreviations: STO-Sell to Open; BTC-Buy to Close; AROM-Annualized Return on
Margin; S/L Tgt-Stop-Loss Target
Sell to Open (STO)
Symbol Expires Strike Premium BTC Tgt S/L
Tgt Sell By Date
CELG 01/19/2008 $32.50 $0.77 $0.31
$1.00 08/08/2007
GILD 08/18/2007 $60.00 $0.80 $0.32
$1.04 05/23/2007
KLAC 01/19/2008 $35.00 $0.51 $0.20
$0.66 08/08/2007
Account Balance less Margin available to invest: 46.7%
Account Balance less Margin and Voluntary Reserve requirements available to
invest: 16.7%
Buy to Close (BTC)
Symbol Expires Strike STO BTC
Profit/Loss Days Held AROM
None
Comments or Questions?
If you have any comments or questions, please direct them to Leonard
<mailto:leonard@irsdehassler.com?subject=Comments%20or%20Questions>
Disclaimer:
This is the fine print and is designed to protect me in these litigious
times, and until I get better wording for this disclaimer, you are under
notice that I am not selling my services nor any other product, nor am I
trying to induce you to trade along or independently, with me. I am merely
offering a journal, so to speak, of my portfolio's transactions and results
with the hope that you will glean information and educate yourselves in the
stock market in general and option trading dynamics in particular. Trading
in the stock market and in options involves substantial risk and much money
may be lost. Beginners, especially those with little or no understanding of
the stock market, lose most, if not all of their capital in a relatively
short time. In other words learn from me and my mistakes and if you want to
risk your money in the markets, that's your business and has nothing to do
with me. I am not your representative, broker, advisor or any other type
agent acting in your interests. As a matter of fact, if you want to invest
your money, I recommend you hire your own advisor other than me. I also
reserve the right to cease publishing this missive, or change its publishing
frequency at any time without further notice or liability to you.
Copyright (c) 2007 Leonard Mednick, MBA, CPA (Ret); Managing Member LIME
Holdings LLC
_________________________________________________________________
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