Stocks – Recent Trade Results (Rough Cut)

05.12.2011

Stocks – Recent Trade Results (Rough Cut)

original report written by Net Advisor

Was going to tweet this as a follow up on recent posted tweets, but this is slightly more than the 140 characters available on Twitter, so decided to make a post here and link this to Twitter.

Citigroup

[wikichart align=”right” ticker=”c” showannotations=”true” livequote=”true” startdate=”12-11-2010″ enddate=”12-05-2011″ width=”390″ height=”245″]

Exited all Citigroup (C) positions. Post reverse split seems too risky for now – for my taste.

  • Results: Long stock = -15.58% (ouch);
  • Outright short position Citi position yesterday (100% $ for $ hedge); Net +3.65%;
  • Long Citi June 40 Put option net +120% (yes, this one more than doubled…overnight – sweet).
  • Overall net result w/ off-setting hedges only -5.71% (net loss).

Hedging can work. Hedges took a stock loss of -15.58% and reduced that loss to only -5.71% Thus hedges reduced loss by +9.87% net benefit (All trades net of commission costs).

Best part. Free up lots of cash, and less stress. Re-evaluate.

Note: This was not easy. These are more sophisticated trading, using multiple option strategies, using 3 independent live software programs and required full-time attention. Trades don’t always work out even with decent technology, so wanted to note this.

Concern:
https://twitter.com/NetAdvisor/status/68348581261754369

Investor newbie’s: Quick edu on options:

Long = thinking it will go up, profit if goes up.

Short = thinking it will go down, profit if goes down.

Long PUT = thinking it will go down, profit if goes down.

Covered Call = you’re long a stock, and sell the right to give up the stock at a certain price you decide in advance by a certain date. In exchange, you get cash now, more than the stock is currently worth. Risk limits upside. Benefit: protects against short-term down movements against the long stock (a hedge).

S&P 500 Index (SPY)

[wikichart align=”right” ticker=”spy” showannotations=”true” livequote=”true” startdate=”12-11-2010″ enddate=”12-05-2011″ width=”390″ height=”245″]

Yesterday opened S&P 500 (SPY) June 130 PUT – closed earlier today +13.21%.

 

 

 

 

 

 

 

Microsoft (MSFT)

[wikichart align=”right” ticker=”msft” showannotations=”true” livequote=”true” startdate=”12-11-2010″ enddate=”12-05-2011″ width=”390″ height=”245″]

Held recent Microsoft trade since 4-29-2011.

Bought MSFT May 25 Puts 4-29-2011 and added to position ($ cost averaging) yesterday. Exited position today for +2.00% gain.

Get 100% cash back plus little more on an option that expires next Friday. MSFT stock could go lower which was the goal of this trade, but the market was recovering from earlier losses and NASDAQ moved to positive from earlier losses. Take cash and re-evaluate. It was 100 contracts, basically controlling $250,000 worth of MSFT stock (10,000 shares at $25). Risk off trade. Stock may go lower and could have been big gain next week, but decided to take risk off this trade with 2% gain in 13 trading days.

 

 

iShares Silver ETF (SLV)

[wikichart align=”right” ticker=”SLV” showannotations=”true” livequote=”true” startdate=”12-11-2010″ enddate=”12-05-2011″ width=”390″ height=”245″]

  • Had multiple Silver short positions via SLV in last couple weeks with 70-100%+ gains.

Usually don’t go into too much discussion on trades. But got into tweeting them for awhile. Not doing this all the time, but thought would share a bit.

Follow Net Advisor™ live on Twitter

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General Disclaimer:
Stocks and Options involve risk. The aforementioned and any other “tweets” are not to be deemed recommendations to buy or sell. The intent is a matter of general disclosure of activity of my work. At times may discuss various aspects of the market as part for educational purposes and as reporting as a  media company of recent or live market events. At times may be long or short those securities being discussed. Make every attempt to disclose positions being discussed.

Characteristics & Risks of Standardized Options Disclosure/ education

This report filed under “Trends.” Please keep in mind that trends can change quickly and oftentimes instantly.

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