Option Investor
Newsletter

Portfolio Review

HAVING TROUBLE PRINTING?
Printer friendly version
Bears Emerge After Long Winter Slumber...

U.S. equities were battered again Friday amid concerns over rising inflation and declining corporate profits. All three of the major indices fell to levels not seen in 5 months and most analysts expect further declines as the stock market heads into the historically "bearish" summer months.

Despite the broad retreat in share values, the majority of "Cash Machine" trades offered in March ended the expiration period with favorable gains. In fact, nearly all of the conservative spreads in the model portfolio, even those which were closed (or adjusted) early to limit potential losses, expired at maximum profit.

The results for MCM Portfolio spreads that expire on 4/16/05 are posted below. Keep in mind, positions in Chiron (NASDAQ:CHIR), LM Ericsson (NASDAQ:ERICY), Estee Lauder (NYSE:EL) and Biotech Holdrs (AMEX:BBH) have been carried forward to the current portfolio summary, thus the data does not reflect all of the transactions in the previous (MAR-APR) expiration period.


MARCH'S CASH MACHINE TRADES

BULLISH SPREADS

Stock Pick Last Exp Long Sold Spread Cost Margn Gain
Symbol Price Price Mon Put Put Credit Basis Maint (Loss)

UNH 93.29 93.27 APR 80.0 85.0 0.45 84.55 $2275 $225
VIP 38.81 34.80 APR 31.6 33.4 0.20 33.18 $0 ($200)
RIMM 79.61 69.70 APR 60.0 65.0 0.45 64.55 $0 $25
CELG 33.05 37.07 APR 27.5 30.0 0.30 29.70 $1100 $150
KBH 119.01 111.19 APR 100.0 105.0 0.35 104.65 $2325 $175
CERN 52.71 56.18 APR 45.0 50.0 0.35 49.65 $2325 $175
------------
Totals $8025 $550

BEARISH SPREADS


Stock Pick Last Exp Long Sold Spread Cost Margn Gain
Symbol Price Price Mon Call Call Credit Basis Maint (Loss)

HAR 108.01 84.19 APR 125.0 120.0 0.50 120.50 $0 $225
SLAB 35.33 27.34 APR 45.0 40.0 0.50 40.50 $0 $200
AGN 75.17 72.18 APR 85.0 80.0 0.45 80.45 $2275 $225
NVLS 27.51 23.78 APR 32.5 30.0 0.30 30.30 $2200 $300
LXK 79.30 75.73 APR 90.0 85.0 0.30 85.30 $2350 $150
------------
Totals $6825 $1100

Spreads Profit =11.11%

Portfolio Activity: Although they expired profitably, positions in Harman
International (NYSE:HAR), Silicon Labs (NASDAQ:SLAB), Research In
Motion (NASDAQ:RIMM), and Vimple Communications (NYSE:VIP) were
closed early to lock-in gains or limit potential losses.


MCM Staff

Monthly Cash Machine Newsletter Archives