Friday, May 18, 2012

13-7-1 for May

I count 13 winners, 7 losers, 1 breakeven for the May option cycle, for a modest overall loss. My ship limps into the harbor with an Apple size hole in the hull, but with the mast intact.

The huge loser was the short put vertical spread on Apple initiated with the stock at 604 (closed at 530 today). The winners were all on the small side and were not enough to make up for the big loser. Some of the other losers were initiated two months ago, some were part of spreads and not really losers, just part of the strategy. It can become difficult to count a spread as a distinct trade because some spreads are legged into.

Overall I give myself a grade of C for this month, even with the modest loss for the month. I was cautious, but not cautious enough. As always with options, could have done better, could have done worse, aggressive bullish traders got slaughtered, aggressive bears did very well for this cycle.

I had a chance to get out of AAPL with a profit, same with another loser MMM. However, if I held until expiration, the losses on both would have been greater. I closed trades on GLD and LGF early, and both would have come in safe, but considering the market, it was a decent decision to take the profit and remove some risk.

Going forward I am short puts on GNC, LGF, short a strangle on IWM, short put backratios on SPY.

Net long IWM, SPY

GNC is the nutrition store
LGF Lions Gate Entertainment
IWM Russell 2000 ETF

AAPL Apple computer
MMM 3M Corp

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