May 13 – Hedging and rehedging

Today is a good day, so far.


It has been a busy morn. I had a few things get done. I am nearly hedged. I see very heavy resistance above us. Something is going to happen, and I don’t know what. So what is a boy to do?
I have been reading a number of books, one of which is The Way of the Warrior-Trader by Richard McCall

The real value of recognizing the reality, and dependability, of cycles to the warrior-trader is knowing that he should plan appropriately for holding on tight during the predictable hard times, and then be prepared to move like hell in the good times. This reminds me of a person on a slow moving merry-go-round that passes by a basket of money once a month. As he passes by the basket on each monthly cycle, he has only 10 precious minutes to grab all the money he can before the basket is out of reach again.
The non-warrior simply sits back on his butt complaining about his poverty and lot in life. When the money basket suddenly appears around the curve, he is taken by surprise and only has time to take a few reckless grabs at the money. But the warrior-trader knows that the money (and all other positive, desirable things) will be coming back within reach eventually. He has carefully conserved his energy and resources in preparation for the eventual return of his financial gathering opportunity. And thanks to the laws of Responsibily, Synchronicity, and Manifestation – the more ready and vigilant he i, the faster the Merry-go-round turns and the quicker the money basket comes around!

I like this quote for a number of reasons, but the most significant is the need to remain patient when that is important, and aggressive and decisively when it is time to be.
Here is what I am doing:
PM – Exited 2 units of Dec/Jan 55c for .15. I wanted to take some off the table.
UST- Major rehedging going on. bought back 1/3 of my May 55c for .05, and rehedged 1/2 of my portfolio with June 55c for .70 to .75.
POZN – Exited the only unit of May/June 10p for .10. I bought this for a .05credit.
WMT – I may have entered in too early with a small position 1unit @ 56.79. I am looking for some covered option strategies Now.
Bought a unit of June 52.5c/57.5 bull call spread for 3.30 @ 56.70. There was a major puke @ 1pm down to 56.38 of 4 million shares. During that selloff I picked up another tranche of covered options @ 3.25. Whew. I am not feeling that much financial heat, but yikes there are some big fellas getting out.
AFL- I called at audible on this. I do like it, but I exited 1/3 of a unit at resistance. June 65/70c out @ 2.45.
BJS – Exited 1/5 of my July 32.5c @ 29.97 for 1.00. My analysis says this is going higher, but I wouldn’t have forgiven myself if I didn’t take some off the table at such a significant resistance point.
BTE- Exited 1/4 of this June/july 25c position for a .15 loss. Bummer. I just don’t want to get caught paying the dividend on these June shorts.
BBD – Exited 2units for a .15 loss. Somewhat of a bummer to be force out. Exited on a trendline break @ 22.86.
A drop in MFE would be exquisite. something is going to happen above 37, or below 36.70. I am hoping for DOWN.
Here is a song that is just about present. I was listening to it while I was walking the streets in downtown Denver. Unbelievably cool.

Positions that are moving:
BJS – It was beaten on this morning, but now it is starting to move in my favor. UP.
AFL – running into resistance @ 67.
COF – flying into my butterfly net.
HR- It has given back all of yesterday’s gain
IMA- Sold at the top yesterday, It has moved all the way down to support.
YHOO- Is getting no love. No problema though. I have a covered option position with max profit @ 25 and above. Carl Icahn is pushing for new board, the stock is catching a bid!
IACI – is running up and away from my calendar.
End of the day, I am sitting on:
Deltas + 883 Upward movement would be beneficial, but I am well hedged. (BBD, UST, HR, AFL) provide all of the positive Delta exposure.
Gamma -773.
Theta – 137, I would like to put more theta decay.
Vega – 1002. And increase in Volatility would be helpful.
As I mentioned yesterday, my portfolio is taking very large swings. Down 6% on the day. I am still not worried, but I would like to find some good calendars. I don’t see many really good opportunities at this time.

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