Thursday, May 24, 2012

update to the $FFIV PaperTrade Portfolio

27 july - with stock near 97, i sold the Aug105 short call for $140.. chump change, but ratio spreads are not pricing good now that earnings are over. start working on getting some income now.


20 july - stock been acting poorly since entering this, again no rebound in time to make the ratio spread profitable at opex time so the july 110/110 expired worthless from a .95 entry.. just holding the the long 2014 Leap right now. position down about $1800 . trade in a google docs spreadsheet


15 Jun - didnt get the rebound was looking for so the June ratio spread portion will expire worthless, so for the July opex i closed this worthless jun ratio and put on a July ratio..

Buy the July100/110 call ratio spread for .95 (buy one 100, sell two 110's)

going to pay .95cents to put this on. as you have probably noticed the earlier you put on ratio spreads the wider you can go on strikes and/or the cheaper it is. again, with just this ratio, the profit range is about from problem if it goes above 120 since earnings are before opex last time i looked, since the underlying LEAP will be gaining in value from where it closed today. after one month this "position" is down about $800. plenty of time till jan2014. no need to sweat the day to day moves. google docs spreadsheet

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31 May - stock down some since entering the LEAP..not a big deal. will see lots of ups and downs till 2014... today will add a Jun ratio spread to position for upside move till june opex.

Buy the June 105/110 ratio spread(buy one 105/sell two 110's).. can be put on for credit but will enter zero into spreadsheet to keep it simple

no added buying power needed. just the ratio profits from 105-115.


24 may - stock has made a huge down move since earnings high near 138ish, today with sympathy move with NTAP guidance...finally has made the gap fill ive been posting and also today tagging the 200day. for the PaperTrade Portfolio i will initiate a long position assuming that stock will rebound from this general area.

Buy the Jan2014 75strike call for about $47 ($4700)

i will look to add a short front month call when stock rebounds to make position into a diagonal spread. This is a 2014 call option, so you do not need to fret over the day to day moves of the stock, could go down from here but you have almost 2 years to keep selling short calls, doing ratio spreads, collars, etc every month. With this 2014 call you control 100shares for $4700 vs buying 100shares at $10800.

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