Option Investor


Printer friendly version
TIME TO ROLL -- AGAINGood Morning Troops,

Well, here we go again. The market just won't quit -- but we can be just as stubborn as the market can be. Basically, we should have exited a few days ago on the pullback for a relatively small loss. Many of you did, and I salute you. I'm sure I'll be hearing a lot of "I told you so's -- and I deserve it.

I'm going to close out our June 1535/1550 bear call spread 6.80. That means that we'll be spending $12,240 (18 contracts x $6.80).

We won't close out the 1410/1395 bull put spread right now. But you can if you need the maintenance dollars for other purposes.

It seems like it should have topped out a long time ago, but we've been saying that for over a month now. We could keep rolling out and rolling out simply because we have a large enough account to accommodate the adjustments. Sooner or later, we'd be right. But, it's time to move on -- for the sake of being prudent, for our mental well being, and for educational purposes as well.

Rolling out positions like this is no fun, but it does demonstrate the value of having a decent sized trading account and keeping powder dry. However, at this point, let's use our extra powder for more constructive purposes.

For those who choose to exit now, your CPTI portfolio will likely take a loss for June. The loss on the SPX position will be about $10,180 ($12,240 - $2,060). The profit from our other two June positions is $2,900 -- for a net loss of $7,280. Hey, it happens -- fortunately not too often -- and is all part of doing business.

Good luck and trade smart!


Orders to purchase or sell securities through your account with OptionsHouse, Inc., an independent registered broker-dealer ("OptionsHouse"), shall be accepted and executed solely by OptionsHouse, subject to the terms and conditions of your individual account agreement with OptionsHouse. OptionsHouse makes no investment recommendations and does not provide financial, tax or legal advice. All inquiries regarding your OptionsHouse account, including any disputes or trading errors, should be directed to OptionsHouse. Option Investor, Inc is not a registered broker-dealer and is not in the business of transacting trades. Furthermore, Option Investor, Inc is not a registered investment adviser, does not provide financial, tax or legal advice, and is not recommending that you buy or sell any particular security. OptionsHouse has made its services available to you via Option Investor, Inc as a courtesy. OptionsHouse and Option Investor, Inc are separate and unrelated entities. OptionsHouse is not affiliated with and does not endorse or warrant the products or services of Option Investor, Inc.

Couch Potato Trader Updates Archives