USO Update

The market opening today provided a bittersweet condition. The good news is that USO opened above our stop, lowering our exposure to assignment. However, we had been stopped out, buying to close the June 38 puts at $0.65. This produced a loss of $0.25.

Lessons learned, many! First, dropping down to the next lower strike price may have kept us in this position, and lowered our risk of assignment. Although we would have received a lower premium, we would have more likely made a profit.

Second, when we opened this position, intraday trading appeared to be pivotal, in that our intraday trending was on the verge of changing. Although the rise in volatility at the time may have contributed to higher premiums, I feel we should have taken a more conservative approach.

Lastly, and I think this should be a new rule for me, DON'T TRADE WHILE TRAVELING! I did not have access to all my tools, and this is a severe mistake.

I would like to explore more cash flow plays for USO, provided it finishes it's current retracement and continues its up trend.

I am on my way to Hawaii for my honeymoon. I will write again next week.

John
Sent from my Verizon Wireless BlackBerry

Long time no hear?

Hello everyone. It has been a while since I've posted anything, so let me fill you in. I just married my beautiful wife, Melissa on Saturday. We are heading to Maui tomorrow.

The market has been interesting lately. We have seen a good rally, but now lately we have seen retracement. This is interesting for this week since June options are expiring soon. Therefore it has been hard to find any items to sell puts on.

Nonetheless, I had sold the $38 June puts on USO for $0.40. Realizing that the chance of assignment within the next 3 days is possible, although unpreffered, still leaves us with an option with creating a nice covered call play in an overall uptrending ETF.

Overall, this position is managable and I feel confident in making it profitable.

Until next time.
Sent from my Verizon Wireless BlackBerry