Option expiration April 2009

All April options expired today, and i have one May put option left. I left just one contract of this put option as a lottery ticket.

The monthly profit is the net credit of the portfolio, and the remaining long option.

Apri P&L = $1,270 + 1 contract of Rut May 380 put.

position adjustment

Since we are closer to the expiration, we have to start managing gamma risk. Yesterday the momentum was very strong and so i made an adjustment to sell 1 contrat of RUT Apr 380 put for $2.10. Friday price action will determine how i should adjust my position next week.

Credit to account today = $210

Total Debit for the portfolio = $1980

portfolio adjustment

I sold one contract of RUT Apr 480 call at 1.9.

I bought 2 contracts of RUT Apr/May 390/380 put at 6.9.

Debit today : 690x2 - 190 = 1190.

Total debit for the portfolio (excluding commission) = 2190.

New position

i just bought 5 contracts of RUT diagonal 460/480 call at a debit of $2.0.

Total debit to the account : $1000

trend down day

This is a classic trend down day without any leadership.

I covered part of RUT Mar 460 call at $0.1. Tomorrow is likely side-way or 50%rebounce.

Current position:
RUT Mar 460 call ratio : 0.4
RUT Apr 480 call ratio : 1.0
RUT Apr 490 call ratio : 0.2

position adjustment

sold 40% more RUT Mar 460 call at 0.45, and sold 20% of April 490 call at 0.7. Trying to achieve 2:1 short long ratio.

After the adjustment, i have:

short Mar 460 call ratio 1.4
short Apr 490 call ratio 0.2
long Apr 480 call ratio 1.0

What is the "right" move

The market is irregular but is always right. Never argue with the market or you'll lose money.



Current positon:

short RUT Mar 460 Call
long RUT APR 480 Call