Option Investor

Excited Yet?

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Last week the headline was "Excitement Just Ahead" and we definitely saw some volatility in the markets. Unfortunately that volatility was all to the downside and any long positions were beaten severely.

The bright side was oil's return to $50 and our patience was rewarded. We have multiple new plays today.

The FDX put we retained from the busted FDX play last week closed at $10.50 on Friday. I doubt anyone held it into the close but it started the week out at $5.30 and completely erased the 95-cent loss on the leap. The recommendation was to hold it if transports were still falling and that turned out to be the best play. Brave traders who held it all week were well rewarded.

I am glad I tightened the stop on Adobe to take us out for a nice profit because the bottom fell out over the last three days. Our stop at $66.50 was hit on Tuesday morning and it closed at $60.65 on Friday. Funds were definitely selling the winners to raise cash.

Symantec also took a header off the high board into an empty pool and I am giving up on that position. Our insurance put is now $3.60 in the money but not quite to a breakeven on the overall trade. I am closing the leap and retaining the put.

Our puts are working nicely with JBLU, CAL, OSTK, TOO and GM all falling with the market. The airlines fell despite the drop in oil, which should tell us something about the future.

Unfortunately we did not get filled on the DJX puts on Tuesday. The trigger point was 10550 and the Dow only made it to 10529. I would like to take credit for having the right plan but it failed because I was too greedy on the entry. Tough to pick those numbers exactly several days in advance. (grin) Hopefully anyone ready to take that trade would have fudged once the Dow rolled over 20 points below our target. Those $6 puts are now $7.50.

I said last Sunday that the week would be a critical week in the market and my target for a turning point was Friday April 15th. Looks like I was a couple days late but then we don't know what next week is going to bring. It could be exciting!

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