Back on track!
In last week’s $109,729 Portfolio Update, from July 8th, we made a very well-timed bottom call and removed our protectiveFAZ puts, added some stock and took out some callers and the nextmorning was a perfect bottom for us, giving us great prices across the board for our moves. We have not yet found a lot of new plays, perhaps I should have designated some of the many plays we picked upduringlast week’s sell-offfor this portfolio but, frankly, I forgot at the time-so we technically still have the same old things. I will make an effort to find some plays this week that fit here.
I said last week that the first two weeks after you sell options are usually the worst and the rising VIX had boosted the premiums of the puts and calls we sold and thatnone of that matters until expiration day and that we were mainly on target despite showing unrealized losses of $3,890. Once again we demonstrate the glory of not panicing as our unrealizedlosses have now fallen to $1,002 already and we even transferred a nice dividend payment (LYG) to cash! It’s important to get used to theebb and flowof this over time. We only addtheprofits as weclose positions from our April 10th start withour virtual$100,000. We arenot including profits in the headerfromthe positions still working because:IT ISN’T REALLY A PROFIT UNTIL YOU CASH IT OUT…
The primary goal of this portfolio is to be conservatively hedged. The secondary goal of this portfolio is not to mess around with it. These are meant to be nice safe(ish) positions that do not require you to sit glued to a monitor all day. If you are new to this section, please read the May 25th update as there was much wisdom in there. Today is the Wednesdayof expiration week all moves must be made by Friday, of course. Decisions need tobe made and we’ll be making several moves (see red comments) today and morethrough Alerts during the week. Keep in mind this is a virtual portfolio and doesn’t have to be followed exactly, the main idea is to teach proper hedging techniques and demonstrate that you can make a nice return without putting yourself at constant, daily risk. It should be noted that our new moves (in red) can be treated as new entries by someone starting from scratch and, as always, feel free to check with me in chat if…
