Investor's Opinion

Portfolio Update

Published: 2011-08-08 21:51:00 EDT by Unknown

Last week was an absolutely terrible week for my portfolio, and this week isn't looking any better. Being as heavily invested in the market as I am, my portfolio is taking a serious hit. My direct equity positions are now down between 27 and 51%. The saving grace to my portfolio is that I made a few trending option plays that are hedging my losses.

Since May 2011, I have had a 30$ Call option against my DWA shares set to expire in September 2011. On the Friday of last week, I bought 3 17.50$ Put options for DWA and I am thankful that I did. With my equity position down over 37%, the Put options are shaving about 2% from that and will exponentially shave more points off of that percentage as the market and DWA gets hammered. It is just a matter of getting out at the right time since they will expire in December 2011.

Additionally, today I had a 2.50$ Put option sold against my cash for an additional position in CIM. The option is set to expire in December 2011 and is only slightly below the current market value of 2.85$. With the coming weeks I will be allocating more cash to my trading account in preparation for purchasing shares in some really good companies that are being beaten down along with everything else. That is my opinion, you can take it or leave it. Disclaimer: See bottom of page.

CIM - Chimera Investment Corp.
DWA - Dreamworks Animation SKG

Labels: call options, cash-secured puts, covered calls, put options

Updated: 2011-08-21 22:14:59 EDT