Showing posts with label IWM. Show all posts
Showing posts with label IWM. Show all posts
Monday, August 15, 2011
Sold IWM puts
Sold my IWM August $81 puts @ $10.40. This was the bear fraction of a put spread I started in March. The bull fraction was closed in May.
Thursday, May 5, 2011
Sold a whole bunch of positions, as my favored seasonal indicator went bearish (Nasdaq NH-NL 5/17 day moving average, here: http://stockcharts.com/h-sc/ui?s=$NAHL&p=D&yr=0&mn=1&dy=0&id=p65895739383 ). I also closed the lower-strike option of my bear put spread.
Sold to close:
LLL Jan 2013 $60 calls @ $22.20
GSK Jan 2012 $40 calls @ $4.12
JNJ Jan 2012 $50 calls @ $15.37
MDT Jan 2012 $35 calls @ $8.11
AAPL Jan 2012 $260 calls @ $98.00
AAPL Jan 2012 $230 calls @ $124.00
AAPL Jan 2012 $180 calls @ $171.00
Bought to close:
IWM Aug 20 2011 $72 puts @ $1.50
AAPL July 2011 $330 puts @ $7.90
I'm now in 50% investable cash. I have one written put position, on TDSC. I have one bought put position, the higher-strike part of my bear put spread hedge on IWM. I also currently own calls on OXM, HEK, GILD, and AAPL.
Sold to close:
LLL Jan 2013 $60 calls @ $22.20
GSK Jan 2012 $40 calls @ $4.12
JNJ Jan 2012 $50 calls @ $15.37
MDT Jan 2012 $35 calls @ $8.11
AAPL Jan 2012 $260 calls @ $98.00
AAPL Jan 2012 $230 calls @ $124.00
AAPL Jan 2012 $180 calls @ $171.00
Bought to close:
IWM Aug 20 2011 $72 puts @ $1.50
AAPL July 2011 $330 puts @ $7.90
I'm now in 50% investable cash. I have one written put position, on TDSC. I have one bought put position, the higher-strike part of my bear put spread hedge on IWM. I also currently own calls on OXM, HEK, GILD, and AAPL.
Thursday, March 10, 2011
Hedging with a put spread on IWM
I bought Aug3011 $81 strike puts on IWM for $5.81, then sold twice as many Aug2011 $72 puts on IWM for $2.93. That is, I bought the right to sell IWM for $81, and sold my promise to buy twice as much IWM for $72. The two dollar amounts cancel one another; this position was started as a hedge against a drop in IWM.
IWM is the Russell 2000 index. It was at $82 when I made this trade.
So, if IWM declines $10 per share (12%) I will be obliged to buy it at $72. At that point, the $81 puts I bought will be profitable.
If IWM rises above $81, the puts I bought will be worthless--but they would cost me nothing because the purchase of the $81 puts for $5.81 would be covered by the puts I sold for $5.86 (2 * $2.93).
If IWM ends between $81 and $72, the puts I sold will expire unexercised. The puts I bought will have a value which will vary according to the market price.
Keep in mind that I'm on the hook to buy IWM at $72. I initiated this position only because I'm willing to own this amount of IWM at this price. The purchase would also be subsidized by the value of the $81 puts I bought (if IWM drops enough that the $72 puts are exercised by the buyer, I will be able to sell half as many shares at $81 due to the puts I bought).
IWM is the Russell 2000 index. It was at $82 when I made this trade.
So, if IWM declines $10 per share (12%) I will be obliged to buy it at $72. At that point, the $81 puts I bought will be profitable.
If IWM rises above $81, the puts I bought will be worthless--but they would cost me nothing because the purchase of the $81 puts for $5.81 would be covered by the puts I sold for $5.86 (2 * $2.93).
If IWM ends between $81 and $72, the puts I sold will expire unexercised. The puts I bought will have a value which will vary according to the market price.
Keep in mind that I'm on the hook to buy IWM at $72. I initiated this position only because I'm willing to own this amount of IWM at this price. The purchase would also be subsidized by the value of the $81 puts I bought (if IWM drops enough that the $72 puts are exercised by the buyer, I will be able to sell half as many shares at $81 due to the puts I bought).
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