The DPeezy portfolio is having an excellent week so far…both net & booked value have been on the rise, with the latter well off its month-to-date low of -5%…certainly a welcome change! The market however continues to remain rather listless and boring (a Banal Month, as King Thaler termed it), which has significantly contributed to my portfolio’s travails this December.
Take for example the short BWLD position, which (finally) stopped out today for a big loss…but it actually stopped out at a LOWER price point than what served as the original entry for the trade! (In fact, I have since made a slight adjustment to my trading rules to try filter out this kind of “weak” entry.)
The position was opened on the 19th of November, via Dec’09 40. puts (of course, I was inviting trouble right there with such near-term options) at a basis of $1.60/contract, bought as BWLD dipped under $40.95, which was the recent low. From that point on, the stock proceeded to die and hover in essentially a straight line. 18 trading days later and at 20 cents LOWER, the options were jettisoned for a quarter/contract.
Yeah, I’ve harped on this before…but damn, time decay is a bitch!
Also, the underlying will now proceed to drop 5 points in the next 2 days (Friday = expiration) just to rub this shit in some more. 45.86% of the time, it happens every time.
In any case…the booked loss from BWLD was somewhat alleviated by booked profits in SLB, USO, WMT. No new positions were added, so my bias remains slightly bearish:
Excellent example of why I don’t do options.
Thanks for the reference. I’ve been incapacitated for the past day and a half, so I’m just now catching up with your posts.