What a week. It always comes down so much faster than it goes up. You have to be willing to accept these draw-downs and be prepared to make trade adjustments as the markets warrant.
I made two adjustments this week to re-balance my inventory and avoid too many assignments. I like to spread these adjustments out over time in case the market can find support. I only want to make the adjustment if it is absolutely necessary.
On 1/27 I rolled the IAMGOLD Corp. (IAG) puts I wrote forward and down to March 12.50. I decided to take a loss on this as it was breaking down so quickly and the next support was in the 12.50-13.00 area which will also be the 200-day MA.
IAG-Daily
On 1/29 I rolled the SmartHeat (HEAT) puts forward to March and down to the 10 strike. I took a small loss on the HEAT adjustment. There is trendline support near 10.80.
HEAT-Daily
Sell to open Tenneco Inc. (TEN) February 17.50 puts.
TEN-Daily
Sell to open CRZO March 22.50 puts. Support at confluence of rising 50 and 100 day SMA.
Carrizo Oil & Gas, Inc. (Carrizo) is an independent energy company engaged in the exploration, development, and production of natural gas and oil. The Company’s operations are principally focused in producing natural gas plays known as shale plays or resource plays.
CRZO Daily
Sell to open GIL March 20 puts. Support at rising 50 SMA. I sold the 20 strike which should coincide with the 100 day SMA. Earnings on Feb 11th.
Gildan’s principal business activity is the manufacture and sale of active wear, socks and underwear. I also have Finish Line (FINL) on my watch-list with a similar chart – also a sportswear company.
GIL Daily
I had the following options expire in January. January was a good month. I don’t think I will be nearly as prosperous in February.
American Eagle Outfitters, Inc. (AEO) The Jan 15 puts expired OTM. I wrote these back on 11/25/09 for a 7 week return of 5.28% *. AEO is back below the 100 day SMA. I might consider selling some more 15 strike puts if support holds. This will come off my watch list for now.
AEO Daily
Century Aluminum Co. (CENX) I wrote these puts in my IRA back on 11/18. They expired OTM for a 8 week return of 3.23% *. There is support at 12 and I might look to reenter this by selling March 10 or 12.50 puts.
CENX Daily
DryShips, Inc. (DRYS) The Jan 7.50 calls I wrote back on 12/02/09 expired OTM for a 6 week return of 2.16%. I had also sold some 6 strike puts as part of this trade but I closed them out at break even. DRYS is breaking down and I won’t sell any more puts at this point.
DRYS Daily
Diana Shipping Inc. (DSX) I wrote Jan 15 puts in my IRA back on 12/1. This is a 6 week return of 5.61% *. I still hold some DSX in my Roth. My cost-basis is $11.09.
DSX Daily
Energy Conversion Devices (ENER) The Jan 11 puts I wrote on 11/27/09 expired OTM. This was part of a trade adjustment I made to roll the Dec 12 puts to Jan 11. I also wrote Jan 11 puts in my IRA.
ENER Daily
Hanesbrands Inc. (HBI) The Jan 22.50 puts I wrote on 12/08/09 expired OTM for a 5 week return of 2.63% *.
HBI Daily
RTI International Metals, Inc. (RTI) The Jan 17.50 puts I wrote back on 11/24/09 expired OTM. This is a 7 week return of 4.24% *.
RTI Daily
UAL Corporation (UAUA) The Jan 7.50 puts I wrote back on 12/01/09 expired OTM. This is a 6 week return of 6.56% *.
UAUA Daily
* The return is calculated using the premium I received from the sale of the options (less commissions) and the capital required to pay for their possible assignment.
Sell to open MAC March 30 puts. I made this trade yesterday and I am just getting around to post it. I had several REITs in my watchlist and this had the best setup. I went with March expiration as most of my February inventory is filled.
The Macerich Company is involved in the acquisition, ownership, development, redevelopment, management, and leasing of regional and community shopping centers located throughout the United States. During the year ended December 31, 2008, the Operating Partnership owned or had an ownership interest in 72 regional shopping centers and 20 community shopping centers aggregating approximately 76 million square feet of gross leasable area.
MAC Daily
Sell to open February 5 puts. Rising 50 and 100 day SMA. Some resistance at 5.70.
AgFeed Industries, Inc. is engaged in the research and development, manufacture, marketing, distribution and sale of pre-mix fodder blended feed and feed additives primarily for use in China’s domestic pork husbandry market. AgFeed operates through wholly owned subsidiaries, Nanchang Best Shanghai Best, Guangxi Huijie, Shandong Feed and HopeJia. On June 24, 2008, the Company acquired premix feed company. On January 3, 2008, the Company acquired a 70% interest each in Wannian Xiandai Animal Husbandry Limited Liability Co. (Wannian), and Jiangxi Huyun Livestock Co., Ltd. On January 4, 2008, AgFeed acquired a 60% interest in Ganzhou Green Animal Husbandry Develop. Co., Ltd. On January 7, 2008, it acquired Gang Feng Animal Husbandry Co., Ltd. On January 9, 2008, the Company acquired a 55% interest in Yichun Tianpeng Domestic Livestock Farm, Ltd. (Yichun).
I made this trade last Friday and I’m just getting around to posting it. The chart is from Friday as well.
FEED Daily
Sell to open EK Feb 4 puts. I’ve had EK on my watchlist for about a week now. A big move today got EK back above the 50 and 100 day MA which are both rising.
Kodak had some promising new products at CES this year. In addition, there was a lot of volume with the Feb 5 calls. Earnings on Jan 28th.
EK Hourly
Sell to open WFR Feb 16 covered calls. WFR has a lot of supply at the area around $15 and I am anticipating some consolidation. $16 strike lets me participate in some more upward momentum as well as giving me an exit strategy. A pullback to the 50 day SMA and I will likely write more puts.
WFR Daily
Sell to open IAG Feb 15 puts. My order filled late afternoon. IAG is back above the 50 and 100 day SMA. Support at $15 gives me some cushion.
IAG Daily
