Not exactly how I wanted to exit all those plays but we still escaped with our profits.
The morning started off with a bang with Hartford, which had been strong as a rock, getting knocked back for an 11% loss to $21. That took us out of the position early with our stop at $23. That amounted o a $3.22 gain on the options for that position. Definitely no complaints.
Eastman spiked to $52.50 and avoided our upper stop at $52.75 and then fell back through the long stop at $51 at 11:30. Despite the drop the long put failed to really inflate and was bid at $1.50 when the $51 stop was hit. That was a .30 cent loss on the long put but that was easily erased by the $1.80 gain on the short put that was stopped out yesterday. Net was $1.30 on the play.
Walter spiked to $53.48 at the open and easily took us out at the $52.50 stop on the remaining long put for $1.90. That was nearly the low for the day and a 50-cent loss on that leg. The short put was stopped on Monday for a $1.30 gain making the net for the play +80 cents.
Continental exploded higher at the open to 36.50 and then declined to hit our stop at 34.50 at 12:20. The short put netted a dollar gain and the long put cost us 90-cents for a net of a dime on the play. I regret not stopping us out earlier but hindsight is 20:20 and we did not lose on the play except for lost profits.
American Express was caught in the sell program at 10:30 and passed through our entry trigger at $33.25 only a few minutes before hitting our stop at $32.25 in the same drop. Fortunately the entry was $2.40 and the exit $2.70 because it all happened so fast the premiums did not have time to inflate. I think the market maker was in denial as well. We lost 30-cents on the play.
Travelers was caught in the same sell program but it remained the strongest insurer of the bunch. It only hit our entry trigger of $49.50 at the bottom of its decline to $49.32 on the opening dip. It immediately firmed and held its ground the rest of the day until just before the close. The initial stop was $49 but I sent a late afternoon email out changing it to $48.75. I was afraid we would get a sell on close dip and take us out. I am going to leave the stop at $48.75 for Thursday. The entry on the Sep $50 Put TRV-UJ short put was $1.80 and even with the small continued decline that grew to only $2.10 at the close. I think if TRV did break down in the morning it might cost us another 20 cents and I am willing to take that risk.
Travelers is the only position in the current portfolio. I doubt I will be adding any more until we see what the market is going to do.
The last of the positions initiated in August are now closed and I am cutting the spreadsheet of August results off as of today. I will put AXP on the September spread sheet.
For August there were 19 positions attempted. The maximum gain per contract was $322 (HIG) and the maximum loss per contract was $40 (BTU). The total mathematical gain for those 19 positions was $8.42. Hypothetically if you were doing 10 contracts of everything that would be $8,420 in profit. Obviously everyone is not doing 10 contracts and not doing every position but this is one way of measuring performance. I will continue to report each leg individually for every position and you can develop your own scorecard process. Considering how volatile August was I am happy with those results. We lost a majority of our open positions twice due to a major drop in China and its impact on the U.S. markets.
September could be rocky given the +50% rebound from the March lows. If funds start seeing profits slipping away they could be quick on the sell trigger. I have a bias against writing naked calls and only somewhat less against call spreads. I would rather keep our powder dry and wait for an opportunity to write more puts. Steven Gail writes the out of the money put spreads in the Monthly Cash Machine so I am not going to duplicate that here. If there are no plays we will patiently wait.