Today I closed my 610/620 rut spread for $573 resulting in a profit of $21. The reason is that this position was opened as more of a hedge at the start of the month and the fact that I can get out with a small profit on it is a bonus. I'm still bullish but looking at the earnings reports coming in this week, it could be a pretty wild expiration week so rather than worry about it I'm just going to walk away. Having closed the RUT spread my only concern now is if the market rallies above 65 on the iwm this week otherwise it doesn't matter. I also had to pay a dividend of $14.5 per 100 shares on my shorts. I will add that to the cost basis of each of my 6 sets of 100 short shares at the end of the week. CLOSED POSITIONS bot oct 610/620 RUT call @ profit of $21
All in all it was a pretty relaxing expiration cycle compared to the wild runs we've seen so here is how everything settled. I closed all of my 6 iwm puts for $315.70 each. I also closed the following position: short 100 shares iwm @ credit of $4942.23 I covered the 100 shares for $6185 which results in the following loss: $4942.23 - $14.5 (dividend paid out) - 6185 = loss of $1257.27 So here's how stuff closed: CLOSED POSITIONS bot oct 610/620 RUT call @ profit of $21 sold 65 oct iwm put @ profit of $88.30 sold 65 oct iwm put @ profit of $233.30 sold 65 oct iwm put @ profit of $103.60 sold 65 oct iwm put @ profit of $103.60 sold 65 oct iwm put @ profit of $283.30 sold 65 oct iwm put @ profit of $313.30 short 100 shares iwm @ loss of ($1257.27) Total loss for Oct cycle = ($110.87) As for returns I have the following: Jan cycle = $683.17 Feb cycle = $2051.06 Mar cycle = $796.14 Apr cycle = $389.58 May cycle = $681.73 June cycle = $1587.96 July cycle = $28.44 Aug cycle = $1304 Sep cycle = $1591.25 Oct cycle = ($110.87) Total gain = $9002.46 Percent return = 9002.46/30000 = 30.00% Still need to unwind 500 short shares of iwm.
On friday I opened the following position: bot nov 610/620 RUT call @ cost of $562 Today I opened: sold 65 nov iwm put @ credit of $374 So here are the positions I have open going into november and I have adjusted the credit received down for my 500 short shares of IWM because I had to pay a dividend of $14.50 per 100 shares last cycle. OPEN POSITIONS short 100 shares iwm @ credit of $4525.79 short 100 shares iwm @ credit of $4976.66 short 100 shares iwm @ credit of $4830.38 short 100 shares iwm @ credit of $4886.13 short 100 shares iwm @ credit of $4990.94 bot nov 610/620 RUT call @ cost of $562 sold 65 nov iwm put @ credit of $374
Damn should have waited but oh well it is what it is. I added the following today: sold 65 nov iwm put @ credit of $374 I am planning on adding 2 or 3 more of these puts. We sliced through the 10 day and closed just below the 20 day so lets see if we bounce here. Otherwise I'm looking for a trip back down to 590ish.
Hmmmmm tough read. The RUT is HORRIBLY underperforming here. The RUT has broken its 50 day avg and the next stop at the 200 day is way down around 550 which means we could be in for a considerable drop. HOWEVER, we still have the S&P above its 50 day by about 17 pts. So its going to be key to see what the S&P does here. If S&P can find support at the 50 day then it should cause a pretty nice bounce on the RUT and we should see the RUT outperform to the upside (there's a nice pair trade setup here but thats a different journal). There is the other possibility that we break the 50 day on S&P in which case odds are high that we get a significant pullback 10-15% off the 1100ish high which will take us to the 200 day. I do believe if that is the case then I don't see enough evidence right now to support a break of the 200 day as of now. So if we do test the 200 day (550ish) on the RUT then I plan to cover at least 200 (if not all) iwm shares as I believe that we will end the year higher than 550. I'm not too concerned at this point because all the indexes are mixed, RUT is under 50 day, S&P is above 50 day, Naz is above 50day so I am still viewing this as healthy profit taking before the GDP report on thursday. Its when all the indexes are in sync that I begin to look for a clearer trend....ie if all three indexes are breaking down through their 50 day, or are breaking through to new highs. Right now we have just RUT under 50 day so its not significant. If S&P and Naz break their 50 days as well then we are looking at a high probability setup to pullback to the 200 day and finally get that big 10 - 15% pullback that everybody's been whining about. So lets wait and see.... Today I added the following position: bot nov 530/540 RUT call @ cost of $892