Friday, June 18, 2010

4-0 for June

Four winners zero losers for the June option cycle, a good month. The winners were all short puts TLT Jun 89 and Jun 84, SPY Jun 100, BRKB Jun 60. All four of these options were deep in the red at some point after entry.

The SPY Jun 100 puts had over a 1000% drawdown during the flash crash. This means that the buyer of the option had a ten-bagger, and had I closed the trade then I would have lost ten times the small premium collected. It serves to illustrate how difficult it can be to make money way out of the money options and holding until expiration. Even with all the news, these puts close out very safe during expiration week.

GLD continues to make new highs. The sentiment seems good for further gains. Unfortunately, I closed out one GLD trade for break even last cycle, and it would have come in very easily. I have little exposure as my short GLD Jul 100 puts are close to delta zero.

Long BRKB, GLD, SDS, SPY, TBT, TLT
SDS/SPY = short strangle on SPY
TBT/TLT = short strangle on TLT

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