Sunday, February 4, 2007

Update on February Trades Expiring in 14 Days.

The markets rose last week making all the open Bull Put trades much safer. I also executed a second RUT Bull Put spread because my analysis concluded this was a very safe trade also. If the markets keep rising and will execute a few more Bull Put spreads with just under 2 weeks remaining.

We completed an Iron Condor trade on the SPX index last week with a Bear Call spread trade. This trade, 1475/1485, has a short option that is now 27 points from the current SPX Index price. The SPX Index could keep rising to new heights, and if this continues into next week, I will be closing this February spread and rolling to a new spread expiring in March. By rolling to a March spread, with more time, the bid premium collected should offset all , or the majority, of the debit incurred to close the February spread. I will email a detailed Trade Alert outlining the specifics of this rolling trade should it be needed. Of course, the SPX index could reverse direction. Looking at the SPX chart you can see that the current price is touching any resistance trend line drawn. The SPX will either break through this resistance making new highs or reverse direction.

I am creating Flash movie files with audio to illustrate my credit spread trades. If anyone has questions about how to process, close and adjust these trades please send me an email and I will do my best to send back a movie file illustrating the trade. I currently can illustrate these trades using TradeKing, OptionsXpress, and CBOE's Virtual Trading system. This file will be a zipped folder that must first be unzipped. Once unzipped you click the HTML file included in the folder. This HTML file should automatically be displayed in your internet browser. There is a set of play back control buttons at the bottom of the movie screen to control the video and audio.

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