Update 9/9/11

AAPL Put Seagull

I rolled the shorts in the AAPL position from Sep to Oct on Friday for a $11.00 credit. In looking back over the last couple of posts it looks like I was using the wrong original cost basis for the % gain calculation. The original trade cost was $14,690 so two weeks ago the profit was 26%, last week the corrected profit is 24%, and today the profit now stands at 30%. In my experience with PCCRCs and the synthetic seagull equivalents, the profit typically has an upper limit around 30% barring an unusual price move (like a takeover), so I will watch the AAPL position closely from here and may lock in the profits by closing the position if I feel like the profits are starting to decline. Looking at the risk graph and comparing the current line (white) with the expiration line (red) it appears the profit can only go down from here.

DLTR PCCRC

DLTR dropped a little over a point last week but the profit on the position is unchanged at 1% as the IV rise offset the delta loss. No adjustments were made on the position.

NKE Call Seagull

The NKE Call Seagull gave some nice profits on Friday and I closed the entire position for a 17% total profit. With earnings coming up in a couple of weeks it did not make sense to roll the shorts to Oct only to close them a short time later. With the spike in IV Friday it was the perfect time to close NKE.

NVS PCCRC

NVS dropped 3 points this week and the spike in IV added some profit. I rolled the short options from Sep to Oct for a $2.50 credit. This roll reduced the debit and risk of the position by $2750. Profit is up to 9%.