Saturday, March 29, 2008

Take Profit On 3 Day Cycle Put Option

We exited our SPY 134 Put Options at the close Friday for a 20% return in two days.

Not a bad return, but less than I thought would come our way.

The main reason I have decided to take profits on the puts, in what may seem like an early
exit is that the odds of a snap back rally have gotten very high and I would much rather sell out of the position and buy it back cheaper then watch it go back to breakeven.

Presently I do not see a trade with call options to play the snap back rally as the risk level remains too high to purchase call options. What I will be looking to do is to get back into the April 134 SPY call options on any strength we may see over the next 1-3 days.

Therefore, the 3 Day Cycle Option Account is Flat.

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