All Bull Put Spread trades and one Bear Call NDX trade expired worthless on Friday January 19th. The market was continuing to rise in a very Bullish pattern so I closed my NDX Bear Call spread and rolled up to a Feb NDX Bear Call Spread on 1/11/2007. I will roll this Bear Call again in February if the NDX Index keeps rising to protect my cash flow. The total return this month was 1.2% ($100/$8,720). All credit and debit premiums collected totaled $100 (25+20+125-600+530) and $8,720 (975+980+2,375+2,420+1,970) margin was required per contract. Those subscribers who completed both sides of the 12/16/2006 NDX Iron Condor trade realized a 3.9% return ($170/$4,330) or (25+20+125/975+980+2,375).\
The NDX Index prices retreated last week and settled well below the 1850 short so those subscribers who could not close and roll this Bear Call Spread had this spread expire worthless earning an additional $80 or more credit per contract. This was a lucky event because whenever the index price is within 10 points of your short option strike corrective action should be taken to close and roll the trade. Those subscribers who had trouble with their brokers closing and rolling this Bear Call Spread trade should send me an email to be included in the upcoming Paper Trading practice session.
Click to view details of these January trades.
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