I'm spent

Yes, I am spent. I've made some gains recently on puts and took some losses on some calls. However, on the way down this last time I kept buying all the way down... and let's just say I am WAY OVEREXTENDED. The losses are mounting up and I really played this one stupid. I am hoping I will be able to get out of these even or at a reasonable loss. But with my bills coming due I may have outdone myself this time. I am contemplating taking out of HELOC to cover the bills because I really screwed up. I figure if maybe I admit it here the market may turn around? Yeah right, most likely not.

Time to Trim

Violent swings and market uncertainty do make one thing for certain. It is completely necessary to trim the portfolio. Below are my options in my portfolio with my actions with explanations that I wish to execute by days end.

5 APVAT (AAPL JAN 200 trading at .23, bought for 1.50) - Incurring big losses here, I bought after RIMM's earnings and then the market as a whole came down. I just feel AAPL has too much cash on their books, which is why I bought this. No sells on this, but my inaction in cutting losses earlier has killed me with this investment.

3 FCXAL (FCX Jan 60 Call...trading at 4.00, bought for 2.65) - Selling 2 of these today, looking for a little higher gain. I may sell all three today, but I bought because FCX was oversold and I was looking for a slight bounce.

6 HPQAJ (HPQ Jan 50 Call...trading at 1.00, bought 3 for 1.10 and 3 for 1.70) - If the option gets to 1.40 I'm selling 3 of these. It's important to have cash on hand in this type of environment.

5 MSAF (MS Jan 30 Call...trading at 2.00, bought 2 for 2.20 and 3 for 1.30) - Hesitant to sell this as a rate cut would send this stock soaring at open. However, short selling ban ends tomorrow and this should weigh somewhat on the market. Looking to sell 3 of these today...2.00 would be sufficient.

20 NCCAU (NCC Jan 7.50...trading at .20, bought for .25) - Bought these in hopes of a quick pop after the bailout passage...this didn't happen, but I'm not worried about this trade. There is much time for this to work and coordinated rate cuts could cause a pop in this. Looking to sell half at .40 or so.

10 AUYAC (AUY JAN 15.0...trading at .40, bought at .60 and .85) - Keeping this as a hedge against the market. If the market goes downward people will buy gold, driving up its price, helping gold companies.

5 YUMAG (YUM JAN 35.0 Call...trading at 1.25, bought for 1.40) - Come out with earnings today and I believe YUM has been oversold, especially with its growth in emerging markets. We will have to see if earnings take a hit.

10 UFBBJ (FWLT FEB 50.0 Call...trading at 1.25, bought 2 for 7.50, 1 for 5.80, 2 for 1.90 and 5 for .80) - Yeah, so this took a hit in the big selloff. I had a chance to sell when it got back up to 45 but the most recent selloff put shares of FWLT down to 28.00. This is absolutely ridiculous, but it's the environment we are in. I hope to sell half of these around 1.90 or so.

I'm overexposed on Calls, I know. I'm looking for good puts to buy, and am zoning in on IBM, CVX, BA and XOM. These stocks are not down nearly as far as they could be.

sold my put positions

We're shaping up for a nice bear market rally tomorrow. I have sold my POT puts for a nice gain of roughly 700 dollars. I also sold my XOM puts, which would have been going for much more later in the day but I sold them for about $100 dollar loss. At this point in the game, I used my raised capital to buy in some down positions, essentially lowering my cost per contract. I bought 5 more FWLT calls for FEB, bought 3 more HPQ calls for JAN and 3 MS calls for JAN. With these I am looking to sell at a breakeven price or slightly higher. I also purchased 5 YUM JAN 09 with SP 35 ahead of earnings tomorrow.

The hard part of investing in this environment is gauging future earnings of these companies. With a faltering domestic economy and a declining global economy, earnings growth projections are most likely to be wrong if estimated today. That means when purchasing a security you have to take this into account...but how much should you devalue the security? I'm not sure of a pricing strategy in this type of environment, which make purchasing puts an easier and somewhat safer investment for the moment.

Regardless, I plan to a portion of these calls tomorrow as cash is king in this type of environment.

Bear market is now.

On friday, I sold my calls in POT and changed to puts. I had bought the calls in preparation for a bounce with the passage of the bailout in the house. I had gotten the bounce prior to the passage, but hadn't sold. I sold them for a very, very slight gain and immediately bought puts. You see, I just have a hunch that they are going to go down like everything else. To me, The AG sector in particular the fertilizer stocks seem overvalued. The stock prices for these (MON, BG, AGU, MOS and POT, to name a few) rely on high growth to accelerate their stock. With a P/E of around 20.8 now (before it was much, much higher), POT needs at least 20% growth to be trading at current prices. With the market unsure of the economy it begins to become hard to predict growth. Although I believe that this sector in general is in an uptrend the nearterm remains very shaky. These puts, which are JAN 09 45, will be held to protect me against drops in the market, where high growth highly valued stocks should sell off first.

banking on a bailout

Monday was definitely horrendous for me. As I had posted in the morning, I lost 1k with the WB calls. I was unable to sell the C calls for a gain and took a loss when the market took a nosedive.

Effectively, I would have had +8k if I had not sold on friday. Instead I ended up losing 1.3k. I liquidated almost everything that day...sold my GS call, sold my HPQ calls, sold nearly everything and bought RF puts and XOM puts. Retarded...anyways things are getting better. After not making the money with C on monday, I rebought on Tuesday and sold half of them. I sold another 3 today, putting me up 750 on the investment.

I still have 2 C OCT 20 calls, and bought more financials as this bailout decisioin looms. I bought 20 NCC JAN 7.5 calls on bailout hopes and takeover rumors, 2 MS JAN 30 calls and rebought 3 HPQ JAN 50 calls. If this thing gets passed NCC should look good and I expect regional banks to merge and create super regionals...we need someone to take WB spot.

That's all for now, all we can do is pull and pray...haha!

Sweet Idea friday.

Friday was a sweet idea day as I dropped all my puts which rose significantly in value over the weekend into today and decided to buy january wachovia calls.

Had I done nothing I would have gained 1200 today.

Instead I am negative 1000. Sweet swing.

I bought C OCT 20 Calls at open for 1.60 to try to make back some of the money. Citigroup now has a superbank.

Oil yesterday

I had to correct my thinking from yesterday. Although long term I remain bullish on oil and its increasing price, I have to say oil increased so much yesterday due to expiration of oil options and short covering in them. that drove prices up nearly $15. Today we are back where we were yesterday and declining. Unfortunately, I got freaked yesterday and sold half of my puts. I lost roughly $60 bucks on them...big whoop but if I had held on for today I'd be well in the plus. I luckily have 10 puts left.

I used my remaining money to open 2 new postions. I am a long term believer in gold as well, as I believe gold will be a hedge against a falling market or the amount of money being injected into the system will result in inflation. Both are wins for gold. I also opened up a position in Apple and GS. I bought a 200 Jan 10 Call for GS and five 200 Jan 09 calls for AAPL. I think GS is well positioned and has solid income and growth. Apple has $23 per share of cash on hand, roughly 20 billion!! I believe, although this is contrary to what Jobs usually does, that Apple will use some of this money to buy back stock. At current levels I see Apple as a buy, and if it declines further I plan to purchase 5 more calls. I just feel at these levels Apple and Goldman are both attractive.