SPXU, FPL, SPY calls

Yesterday I was in and out of SPXU, with a 1.4% loss--ouch. I sold FPL for $50.27. I also closed my June $12.50 GTI puts for $0.05.

Today I sold my SPY June $107 calls for $3.00.

Bought FPL

Put 5% of my portfolio in FPL at $49.50. I'm buying now in anticipation of the quarterly numbers. I waffled for awhile between buying LEAPs on the stock, trying to get it with puts, or buying it outright. The dividend (around 4%) tipped the scale.

Sold FPL

I sold my FPL at $50, taking about a 5% loss on the position. I closed the position due to the company's decision to reduce capital expenditures after a rate hearing went against them. I may write puts to get the shares at a lower price.

Bought more FPL, bought JNJ puts

Today I bought more FPL at $52.90. I already had 2% of my portfolio in this stock; this purchase brings my position to 5%. FPL is an electric utility company with two parts; one a regulated public utility and one an unregulated private energy producer. FPL has not participated in the broader market rally, up only 12% from it's March 2009 lows.

I also bought January 2012 $50 calls on JNJ for $14.70. Since I bought the calls, this means I have the right to buy JNJ at $50 per share any time between now and 2012. JNJ is currently trading at $64.

If I exercise these calls, I'll be buying JNJ for $50 + $14.70 = $64.70. The calls will increase in value if JNJ rises. I'll break even if JNJ is at $64.70 at the expiration date. If JNJ is below that price, my loss on the position will increase until JNJ drops to $50, for a maximum loss of $14.70 per share (i.e., the calls expire worthless). If JNJ is above $64.70 per share, I make a profit. There is no cap to the profit on this strategy. Since JNJ could theoretically increase to infinity, my profit is theoretically infinite, too. In practice, JNJ's record high is around $70 and I'd be surprised (if delighted) to see that height again. In that best case scenario, my profit would be around $15 per share ($70 - 50 - $14.70) if I exercised the contracts.

I could also resell the contracts, later. The price would depend on the time remaining until expiration, and JNJ's price at that time.

Sold RSG, bought FPL and AAPL

I sold my remaining RSG stock at $26.17. I bought 1% FPL at $54.65 and 3.5% AAPL at $204.96.

I'm currently 33% in cash, but 20% is securing puts which expire between now and February 2010--so, about 10% investable cash. I have both covered calls and secured puts expiring next month, and I plan to increase my cash position.