We didn’t do a wrap-up last week as I instead wrote a long,MembersOnlypost (only Part 1 too) on “Setting Up A $100,000 Hedged Portfolio” concentrating on a virtual$20,000 allocation inthe financials for our first sector.
We’re going to do more of these on the weekends as people find themuseful and also because, although they are very popular, I do get tired ofjust reviewing what we did for the past5 trading days every week. Somaybe a little of both today but I aim tokeep this short(as I usually do, but it never works out) so we can do another post on earnings plays tomorrow.
Howis our newsample portfoliolooking after a week? Well let’s see:
- 500 UYG at $3.48, selling5 May $3 calls for .72 and5 May $3 puts for .28, net $2.48/2.74
- UYG now $3.79, May put and call combo now $1.12 = net $2.67 ($95 profit on $1,240 = 7.7%)
- Selling 2 FAS $7.50 puts for .45 naked
- FAS closed at $9.40 so 100% profit of $90
- 500 C at $3.04, selling May $3 puts and calls for $1.11, net $1.93/2.47
- C now $3.65, May $3 put and call combo is $1.19 = net $2.46 ($265 profit on $965 = 27.5%)
- Selling 2 IYF May $36 puts for $2 naked
- IYF closed at $40.26, May $36 puts $1.20 ($160 profit on $400 =40%)
- Selling 2 JPM May $29 puts for $1.95 naked
- JPM closed at $33.26, May$29 puts $1.17($156 profit on $390 = 40%)
- Selling7 FAZ May $10 puts for $2.40 naked (adjusted to reflect Monday’s gap down open)
- May $10 puts are now $2.67 so a loss of $189 (-11.3%). Both our July and Oct escape rolls are still intact so no worries here anyway (this is a hedge to the others)
- 5 FAZ Oct $12.50 calls for $4 (adjusted), selling 5 May $21s for $1.05, net $2.95.
- The Oct $12.50s are now $3.29, May $21s are now .45 so net $2.85, a loss of $50 (3.4%)
So far so good! The FAZ hedges are holding up nicely while all of our upside plays were winners. Our 3 April put sales are expired$90 in profitsso risk off the table and cash put back to work and May Put saleslooksafe enough at the moment, up $316,while the May option plays are up $360 against a $239 loss on the hedges. Overall, we put less than $1,500 of capital to work (there were, of course, some margin requirements – see original post) to make $527 in a week. While…