Friday, June 15, 2012

7-4 for June (grade C-)

Seven winners and four losers for the June cycle. I give myself a grade of C-. Grades since I've doing that are:
B for March
C for April
C for May
C- for June

I am not exactly lighting it up. Despite modest gains, I give myself a C- grade because the losers were some bad errors. These mistakes include today's fat finger mistake on GNC, the mishandling of the exit, and two sets of short calls on LGF sold on panic. Another problem area was GLD, with a poorly timed put sale, and then compounded by selling short calls. I haven't traded gold, silver or the miners well all year.

Some winners include a short strangle on IWM, and a short put backratio on SPY. These were some of my better trades. I legged out of the SPY position for about a 150% net profit basis the initial credit (return on capital is much lower because of margin requirements). I added another layer of short puts further out instead of selling the long puts. Had I sold those puts at the best time, the net profit was up to 400%. A lot of put owners ended up giving back most of their profits on the V-shaped rally. Overall, I was positioned pretty well for the moves in SPY and IWM.

I mangled my long LGF position. Keeping it simple as far as options, would have been much better. The glass half full side is that overall, I am in the green on Lions Gate. Considering that I have been mostly long, and sold my first puts on LGF when the stock was 14.4, then added another layer of short puts at 15.0, being ahead when the stock is a bit lower is a good thing (14.1 close).

Going forward I am short puts on BRKB, EWG and LGF, short strangles on GLD and IWM, and short put ratios on SPY. This nets out to the position summary below:
Net long IWM, SPY
Net short GLD

BRKB Berkshire Hathaway
EWG German stock ETF (been missing this one*)
GNC nutrition store
IWM Russell 2000 ETF
LGF Lions Gate Entertainment

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