Thursday, March 19, 2009
Bought SPY puts and FAZ calls
Made some bets that the market drops after a hefty runup. The Fed's actions seem more out of desperation than anything. The numbers they are putting out to battle the crisis are mind boggling.
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Hello "the option premium collector" author,
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Alex Preece
Bad with my money, great with other peoples!
Negotiator
(I am based in London, England so excuse the weird times you get this email!)
Giant Investments
E: alex.preece@giant.org.uk
T: 01273 224002
Hi PC,
Was there is specific reason you bought APOL puts? and why is it going up? Could you explain please? I may also consider doing it.
Smart - how are you? If you go to the Citron Research site you'll see their expose' on APOL. There has been a lot of short interest. I took a flyer on the puts and got stopped out for a small loss. Now may be the time to go short again but I'm not touching it right now with earnings report due soon...
I am good. I made some money the past two weeks, which shows I am improving. But I wanted to gain more with such a wild rally. I hesitated a bit. Anyways, it is really hard to make money. It was very interesting that ERX puts became worthless finally, but I personally couldn't risk it as it was pretty lucky. One strategy that I found working so far is with selling GDX puts. Usually when gold goes up GDX goes up, and many times with market going up it also goes up. So, on negative GDX days, it is very good to write puts.
Smart - I like GDX. If it were to drop back down to high 20's again and sentiment was anti-gold I think it would be time to load up. Gold sentiment is very cyclical. When everyone and their brother are bullish on gold it's a good time to buy puts. When the commentators talk about the price of gold falling back to 750 or 550 it's time to load up. Right now GDX is a little too rich for my blood although I do have some active June 94 GLD calls. This is a longer term investment for me as I think gold will hit 1000 again. That number has been a major resistance level although we've seen higher highs so maybe we get 1100 this time...stay in touch my friend and good luck.
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