Investor's Opinion

Portfolio Update, Orders Entered and Executed

Published: 2010-05-11 20:42:00 EDT by Unknown

I haven't posted since the 5th of May. Since then I have seen some promising behavior. To start, Capital Product Partners, LP (CPLP) has been stabilizing. The momentum indicators (Stochastic and MACD) are starting to turn back up, so I believe it shouldn't be going down any more in the near future. At the same time, it is looking uncertain that the Call option I bought on it will benefit from growth of the underlying stock as much as I initially estimated. As a result, I entered a Sell-To-Close (STC) order for what I initially thought was 50% profit. After seeing another order STC, that I will mention below, I am realizing that my math was a little bit off in reference to how commission affects the profit and will be making a slight adjustment.

My next portfolio position to mention is that of Brocade Communications Sys, Inc. (BRCD). The three Call options I purchased on it were hit pretty hard last week. However, I believed that my position value would go back up. As a result I made a STC order to capture as much profit on them as I could the next time it went up . Unfortunately, I didn't expect it to go up so quickly and so soon. As a result it executed the trigger price of the order today and I am now out of the position. This is also the position I was talking about earlier when discussing CPLP. As a result of a miscalculation of the commission cost, I am pocketing less than the intended 50% profit on the trade. I should have calculated 150% on the base cost I got in for and then added the round-trip commission costs on top of that value, and then divided that sum by the number of contract shares. That then would have given me the price to sell.

My next portfolio position to mention is that of the United States Natural Gas Fund ETF (UNG). The two Call options I purchased on it were also hit hard last week. I also believe that the value will go up eventually. As a result, I made a STC order to capture a reasonable 50% profit on the position. Unfortunately, the calculation for this order was also off, so I will be increasing it along with the one for CPLP.

Finally, the iShares Silver Trust ETF (SLV) peaked above the $19 strike price for the Call option I sold against my shares. As a result, I am less confident that I will be holding on to both the premium for the call option I sold as well as my shares of SLV. Although I am less confident, I am not concerned, because I will collect a nice profit on the transfer of the shares. That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com

Labels: covered calls, MACD, option strategies, Stochastic, update

Updated: 2010-05-11 22:11:23 EDT