tag:blogger.com,1999:blog-9339736420786766852024-02-20T07:08:36.579-08:00H2 Options --- Equity Option TraderI trade equity options for a living. This blog is dedicated to sharing how and why I place actual trades. Be Blessed!!H2Optionshttp://www.blogger.com/profile/17866211551152350212noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-933973642078676685.post-31369182445092397642014-08-13T17:57:00.002-07:002014-08-13T18:07:27.325-07:00Buying Calls Instead of Stock Strategy Video -- Update on POT ExampleFor today's blog post, I thought I would include my silent video titled: <b><i>"Call Instead of Stock Strategy (CIS): A Stock Replacement Strategy That Efficiently Utilizes Your Capital".</i></b><br />
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<b><i>SEE VIDEO</i></b><span style="background-color: white;">: </span><a href="http://screencast.com/t/TvL9xPSq"><b style="background-color: white;">http://screencast.com/t/TvL9xPSq</b></a><br />
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I produced this video on March 9th 2014. The video identifies 8 ideal strategy criteria that I use when implementing a CIS candidate. The example shown in the video is a real trade I initiated with Potash Corp. Of Saskatchewan Inc. (POT) options. For the record, I am still "technically" in what has turned out to be a long-term option position. My original expectation would be that I would have been out of the trade long before now! Since this trade was initiated on March 7th, 2014, all original options have long since expired or have been rolled out in future months. The original CIS POT options trade that I put on was as follows:<br />
<span style="background-color: black;"><span style="color: white;"><br /></span></span>
<b><span style="background-color: black;"><span style="color: white;">POT underlying Stock Price @ ~$34.68 on 3/7/2014 </span></span> </b><br />
<b> </b><br />
<b> BUY +3 JUN 30 Calls @ $4.95 = -$1,485.00 </b><br />
<b> SELL -1 APR 36 Calls @ $0.59 = +$ 59.00</b><br />
<b> BUY +3 APR 36 Puts @ $2.19 = -$ 657.00</b><br />
<b> SELL -6 APR 33 Puts @ $0.58 = +$ 348.00</b><br />
<b> <u>BUY +3 APR 30 Puts @ $0.09 = - $ 27.00</u></b><br />
<b style="background-color: black;"><span style="color: white;">Original CIS TradeNET DEBIT =-$ 1,762.00</span></b><br />
<b><span style="background-color: yellow;"><br /></span></b>
<span style="background-color: black; color: white;">The original CIS net deltas for such a position as above was approximately +195. The breakdown of the +195 deltas is calculated as follows:</span><br />
<span style="background-color: white;"><br /></span>
<span style="background-color: white;"> </span><b>+3 JUN 30 Calls ~+85 deltas X 3 = +255 deltas</b><br />
<span style="background-color: white;"> </span><b>-1 APR 36 Calls ~-30 deltas X 1 = - 30 deltas</b><br />
<b> </b><b>+3 APR 36 Puts ~-80 deltas X 3 = - 240 deltas</b><br />
<b> </b><b>-6 APR 33 Puts ~+45 deltas X 6 = +270 deltas</b><br />
<b> </b><b><u>+3 APR 30 Puts ~-20 deltas X 3 = - 60 deltas</u></b><br />
<b> <span style="color: white;"> <span style="background-color: black;"> Original CIS Trade NET DELTAS= +195</span></span></b><br />
<b><span style="background-color: yellow;"><br /></span></b>
<span style="background-color: black; color: white;">The +195 option deltas position I originally had with POT as the underlying, equates to having +195 shares of stock in POT. Had I instead purchased 195 shares of POT, my net cost would have been $6,762.50 (POT @ $34.68 per share X 195 shares). So, when I say that options are a more efficient use of one's capital for essentially the same amount of risk exposure this example should show this clearly. In other words, the outright stock purchase for 195 shares at $6,762.50 versus the purchase of longer term calls with some nearer term downside protection hedges costing only $1,762.00 frees up nearly $5,000 of your capital! </span><br />
<span style="background-color: black;"><span style="color: white;"><br />
So what happened to these original option positions you may ask? First of all, POT itself barely moved by the end of April expiration...$34.57 per share. The longer term JUN 30 calls lost about 16 cents to $4.79 ($4.95-$4.79), or ~-$48.00. Of course the one APR 36 short call later expired worthless meaning the underlying price of POT never reached $36.00 per share. This resulted in me keeping the entire premium of 59 cents, or $59.00. As it turns out, I would have benefited much more had I sold 3 APR 36 short calls, but I did not want to "collar" the trade fully, thinking POT would rise in the near term. Finally, the put butterfly hedge: +3 APR 36 puts were sold on April 17th for $1.17; or -$306.00/ -6 APR 33 expired worthless; or +$348.00 / +3 APR 30 expired worthless; or -$27.00. So, the put butterfly hedge managed to net a gain of $15.00 ($-306+$348-$27). Thus, the overall position as of April 17th, 2014 was up a measly $26 bucks! </span></span><br />
<span style="background-color: black;"><span style="color: white;"><br />
The discussion of this CIS trade will be continued! </span></span><br />
<span style="background-color: black;"><span style="color: white;"><br />
Happy Trading!</span></span>H2Optionshttp://www.blogger.com/profile/17866211551152350212noreply@blogger.com0tag:blogger.com,1999:blog-933973642078676685.post-80979622402549854772014-01-25T20:01:00.002-08:002014-01-25T20:01:54.940-08:00January 24th Trading Thoughts --- The Call Instead of Stock (CIS) Strategy<div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span class="apple-converted-space"><span style="font-size: 13.5pt;">Hello Traders,</span></span></div>
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<span class="apple-converted-space"><span style="font-size: 13.5pt;">Thought I would continue a discussion on my current option trading positions and strategies. This segment explores the CIS!! Hopefully it makes sense. I'll try to answer any questions. Glory to God, All Praise is Due Him!! Amen!!</span></span></div>
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<b><span style="font-size: 13.5pt;">Trades #7; 11; 12 Morgan Stanley (MS);
United Airlines (UAL); Yahoo! (YHOO) Purchase
Calls Instead of Stock (CIS); Hedged with Buying a Near-Term Put Butterfly
& Collar by Selling a Near-Term Call</span></b></div>
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<span class="apple-converted-space"><span style="font-size: 13.5pt;">Without question, the CIS option strategy is by far the most
exotic that requires on-going maintenance and adjustments. However, I believe the strategy logic and
purpose is rather straight forward. I
will do my best to explain how I utilize this strategy and the criteria I use
in selecting my CIS candidates.<o:p></o:p></span></span></div>
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<span class="apple-converted-space"><span style="font-size: 13.5pt;">The CIS strategy is essentially a “stock replacement”
strategy. As I mentioned at the beginning
of my prior blog today, I believe options represent the most efficient means of
utilizing one’s capital due to the leverage and time-frame one can benefit with
a small amount of money. I believe the
CIS strategy takes full advantage of this benefit. <o:p></o:p></span></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt;">First</span></b></span><span class="apple-converted-space"><span style="font-size: 13.5pt;"> of all,
to meet the CIS criteria I have to ask myself a few questions: 1) would I like
to own the shares of this company?; 2) are the near-and-longer-term prospects
for the company positive…do they have a great product or service?; 3) do I like
the management team? 4) do they grow their earnings consistently or at least
improving year-over-year?; 5) do they have good growth potential and are they
taking market share?; 6) do they have a strong balance sheet/cash
position? Obviously, these are the same
fundamental questions you would ask yourself if you were willing to commit
buying stock in a company and becoming a shareholder. You want to take the same
approach with the CIS strategy. <o:p></o:p></span></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt;">Second</span></b></span><span class="apple-converted-space"><span style="font-size: 13.5pt;">, I want
to look for companies that trade in a specific price range: Generally $30-$47
per share. I also prefer to have a stock that is trending higher, but has
pulled back recently in price by 1 or 2 percent. I use $30-$47 price range
because it provides easier hedging ability due to single strike options within
the listed option chain. Single strike
options are generally available in this price range. However, once over $50 per
share, most option chains increase by at least $2.50 per strike. This makes it more difficult to hedge your
long call position and would force you to “split-the-strikes” in order to provide
an adequate hedge. The CIS can be done
at >$50 but it’s a bit more difficult to manage. <o:p></o:p></span></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt;">Third</span></b></span><span class="apple-converted-space"><span style="font-size: 13.5pt;">, the
option bid/ask spreads should be no more than 10 cents wide. The narrower the spread, the better the pricing
you can obtain. <o:p></o:p></span></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt;">Fourth</span></b></span><span class="apple-converted-space"><span style="font-size: 13.5pt;">, there
should be sufficient open interest volume in order to have decent liquidity for
trading in and out of the options when it comes time to enter and exit a
position. <o:p></o:p></span></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt;">Fifth</span></b></span><span class="apple-converted-space"><span style="font-size: 13.5pt;">, I need
the stock to have some volatility and price movement. As discussed in my prior blog regarding double calendars, I
explained how volatility in options provide more attractive premium values and
volatility can help in hedging the CIS strategy. I typically look at a 1 year monthly
chart and want to see price movement average approximately $2-$4 per share per
month.<o:p></o:p></span></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt;">Sixth</span></b></span><span class="apple-converted-space"><span style="font-size: 13.5pt;">, I now
want to select a long deep-in-the-money (DITM) call option that has at least 90
days till expiration. I want
to purchase the calls having at least an 80% delta. I do this because I want the calls to
represent or mimic the actual price movement of the underlying stock. The lower the delta, the less impact it has
to move in relationship to the stock price.
The higher the delta, the greater the impact it has to move in relationship to the stock price. The higher the call
delta, the higher the option premium price or cost will be.
At this point you will need to determine how much capital you are
willing to commit. Initially I typically
buy only +3 long contracts with the idea of possibly buying more depending on how the position behaves. I'll describe that below under various scenarios. As previously stated, the capital requirements are much lower with options than stocks... even DITM options. For example, if you were buying stock instead of the options and the stock is currently at $37 per share for 300 shares, the required outlay for the stock purchase would be 300 x $37 = $11,100. Whereas the DITM may only cost $6.50 each x 3 contracts (or 300 shares) = $1,950 for essentially the same movement in stock price. That is powerful and efficient use of leverage and capital.<o:p></o:p></span></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt;">Seventh</span></b></span><span class="apple-converted-space"><span style="font-size: 13.5pt;">, after
you have selected your long calls to buy, you now need to select your near-term
hedge(s) to protect "some" downside risk to your long DITM calls. Notice, that I said "some", not all your risk. To hedge, I
choose a near-term put butterfly with 25-45 days to expiration. Specifically, assume that the stock is
currently trading at $37 per share and I bought +3 April 32 DITM 90-day
calls. I would immediately hedge this
long call position by buying +3/-6/+3 of the February 38/35/32 (27 days till
expiration) put options. Let’s also assume
the net price of the put butterfly is a debit of $0.54 cents per contract. Thus, the total cost of the put butterfly hedge is approximately $150.00. The near-term put butterfly will help hedge your long
call purchase to the 35 short strike of the near-term option. At the same time you can further hedge your
long call position and possibly pay for the entire cost of the put butterfly protection by selling
a near-term call. For example, you may
be able to find a February 39 call that sells for $0.65 cents. By selling -3 calls, or receiving a credit of $195.00 you more than pay for
your put butterfly hedge at $0.54/$150.00!
However, by selling the 3 Feb 39 calls, you have now “collared” the
trade and have limited your upside potential on your long calls. Depending upon how bullish I am on the stock,
I may forego selling calls initially with the hopes of either getting a higher credit
or increasing the strike by a dollar or two to say maybe selling Feb 40 or greater call at a later
date, or perhaps a Mar 41 call. This decision is usually "one from the gut"!<o:p></o:p></span></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt;">Eighth</span></b></span><span class="apple-converted-space"><span style="font-size: 13.5pt;">,
depending how things work out after placing the trade, you manage the trade
accordingly. For example, assume the
price jumps from $37 to $45. Your
long-dated calls will also jump in relation… in fact the delta will probably be
close to 100% under that scenario. Your
Feb put butterfly would be nearly worthless, so you would lose on that end of
it… but so what? You will have a very
substantial profit on your long calls... remember it’s essentially the same as owning
300 shares of stock. What if you sold a
near term short call and collared the trade?
Obviously, you would lose on that as well. You then would have to decide if you want to
close out the position entirely or possibly roll the near-term call to a later
month? It’s your call! It’s a good problem to have if you ask
me. What about the scenario where the
stock price drops to $34 per share or lower then what?
Well, it depends on a number of things… is the stock down for a
firm-specific reason or is it in sympathy to a downgrade made on a
competitor? Is it a macro reason? Or worst case, did something fundamentally go
wrong with the company that changes your outlook? If that’s the case, you need to exit your
entire position. Otherwise, you may see
this as an <i>opportunity</i> to buy more DITM calls, possibly 30-days further out in
time depending on when this “news” hits or share price drop happens. If you
decide to buy more, it may be necessary to close-out of your put butterfly or
keep it depending again on how many days remain till expiration. In either case, you still need to buy another
+3/-6/+3 put fly… in this case at $34 per share you would likely select the
35/32/29 strikes. Keep in mind depending
on the volatility of the shares, the strike width may be only 2 strikes wide if
it is a less volatile stock. The more
volatile the stock, the greater the width of the strikes you would choose as
your put fly hedge. If you had a scenario where
the stock price fell to $35, your near-term put butterfly would be at maximum
profit at expiration and you could then use the proceeds to help finance the
purchase of more DITM calls and start the process all over again. <o:p></o:p></span></span></div>
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<span class="apple-converted-space"><span style="font-size: 13.5pt;">In the final analysis, I guess I like the CIS strategy because how often have you
purchased a stock and it immediately went against you? Provided the stock does not crater, and even
if it did you are only out the debit you paid for the calls, at least the put
butterfly hedge and short call if collared , will under most conditions be profitable. And if I still like the company, I can simply buy
more DITM calls and try it again!<o:p></o:p></span></span></div>
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<span class="apple-converted-space"><span style="font-size: 13.5pt;">Below are the current CIS trade set-ups I have on. <b><i>These are real trades and are for illustrative purposes only.</i></b><o:p></o:p></span></span></div>
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<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 1153px;">
<colgroup><col style="mso-width-alt: 4205; mso-width-source: userset; width: 86pt;" width="115"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 2377; mso-width-source: userset; width: 49pt;" width="65"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 2377; mso-width-source: userset; width: 49pt;" width="65"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 2377; mso-width-source: userset; width: 49pt;" width="65"></col>
<col style="mso-width-alt: 2779; mso-width-source: userset; width: 57pt;" width="76"></col>
<col style="mso-width-alt: 2633; mso-width-source: userset; width: 54pt;" width="72"></col>
<col style="mso-width-alt: 2377; mso-width-source: userset; width: 49pt;" width="65"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 2779; mso-width-source: userset; width: 57pt;" width="76"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 3035; mso-width-source: userset; width: 62pt;" width="83"></col>
<col style="mso-width-alt: 2377; mso-width-source: userset; width: 49pt;" width="65"></col>
<col style="mso-width-alt: 3145; mso-width-source: userset; width: 65pt;" width="86"></col>
</colgroup><tbody>
<tr height="40" style="height: 30.0pt;">
<td class="xl149" height="40" style="height: 30.0pt; width: 86pt;" width="115">*MS @~
$31.03 / $31.54 / $30.55</td>
<td class="xl151" colspan="5" style="width: 242pt;" width="322">MS CIS COLLAR WITH
BUTTERFLY HEDGE</td>
<td class="xl109" style="width: 49pt;" width="65">Open</td>
<td class="xl111" style="width: 57pt;" width="76">Dollar Value</td>
<td class="xl131" style="width: 54pt;" width="72"> 01/24/14</td>
<td class="xl130" style="width: 49pt;" width="65"> Current </td>
<td class="xl110" style="width: 48pt;" width="64"></td>
<td class="xl110" style="width: 57pt;" width="76">Net P&L</td>
<td class="xl124" colspan="2" style="mso-ignore: colspan; width: 110pt;" width="147"> MS
Current Price:</td>
<td align="right" class="xl123" style="width: 49pt;" width="65">$30.45</td>
<td style="width: 65pt;" width="86"></td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl112" height="17" style="height: 12.75pt;">12/20/13</td>
<td class="xl110">Buy</td>
<td align="right" class="xl110">3</td>
<td class="xl144"> Apr 14</td>
<td align="right" class="xl110">27</td>
<td class="xl110">Call</td>
<td align="right" class="xl113">$4.60</td>
<td align="right" class="xl118">-$1,380.00</td>
<td class="xl143"> </td>
<td align="right" class="xl150">$3.925</td>
<td class="xl122"> </td>
<td align="right" class="xl118">-$202.50</td>
<td class="xl106" colspan="2"> Current Avg. IV:</td>
<td align="right" class="xl125">29.81%</td>
<td></td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td class="xl112" height="20" style="height: 15.0pt;">01/23/14</td>
<td class="xl110">Buy</td>
<td align="right" class="xl110">3</td>
<td class="xl144"> Apr 14</td>
<td align="right" class="xl110">27</td>
<td class="xl110">Call</td>
<td align="right" class="xl113">$4.80</td>
<td align="right" class="xl118">-$1,440.00</td>
<td class="xl143"> </td>
<td align="right" class="xl150">$3.925</td>
<td class="xl122"> </td>
<td align="right" class="xl118">-$262.50</td>
<td class="xl133" colspan="4"> 1 σ move +/- to Feb
expiry: $32.95/ $27.93</td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl112" height="17" style="height: 12.75pt;">01/24/14</td>
<td class="xl110">Buy</td>
<td align="right" class="xl110">3</td>
<td class="xl144"> Apr 14</td>
<td align="right" class="xl110">27</td>
<td class="xl110">Call</td>
<td align="right" class="xl113">$3.95</td>
<td align="right" class="xl118">-$1,185.00</td>
<td class="xl143"> </td>
<td align="right" class="xl150">$3.925</td>
<td class="xl122"> </td>
<td align="right" class="xl118">-$7.50</td>
<td class="xl108"></td>
<td></td>
<td class="xl126"> </td>
<td class="xl127"></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl107" height="17" style="height: 12.75pt;"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl113"></td>
<td class="xl113"></td>
<td class="xl143"> </td>
<td class="xl129"> </td>
<td class="xl122"> </td>
<td class="xl113"></td>
<td class="xl108"></td>
<td></td>
<td class="xl126"> </td>
<td class="xl127"></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">12/20/13</td>
<td class="xl120">Sell</td>
<td align="right" class="xl120">-3</td>
<td class="xl120"> Jan</td>
<td align="right" class="xl120">32</td>
<td class="xl120">Call</td>
<td align="right" class="xl121">$0.47</td>
<td align="right" class="xl121">$141.00</td>
<td align="right" class="xl145">01/17/14</td>
<td align="right" class="xl146">$1.36</td>
<td class="xl147">closed</td>
<td align="right" class="xl121">-$267.00</td>
<td class="xl108"></td>
<td></td>
<td class="xl126"> </td>
<td class="xl127"></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">01/17/14</td>
<td class="xl120">Sell</td>
<td align="right" class="xl120">-3</td>
<td class="xl148"> Jan4</td>
<td align="right" class="xl120">32</td>
<td class="xl120">Call</td>
<td align="right" class="xl121">$1.39</td>
<td align="right" class="xl121">$417.00</td>
<td align="right" class="xl145">01/22/14</td>
<td align="right" class="xl146">$0.46</td>
<td class="xl147">closed</td>
<td align="right" class="xl121">$279.00</td>
<td class="xl108"></td>
<td></td>
<td class="xl126"> </td>
<td class="xl127"></td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl119" height="17" style="height: 12.75pt;">01/22/14</td>
<td class="xl120">Sell</td>
<td align="right" class="xl120">-3 </td><td class="xl120">Feb</td>
<td align="right" class="xl120">33</td>
<td class="xl120">Call</td>
<td align="right" class="xl121">$0.46</td>
<td align="right" class="xl121">$138.00</td>
<td class="xl143"> </td>
<td align="right" class="xl129">$0.18</td>
<td class="xl122"> </td>
<td align="right" class="xl121">$85.50</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl119" height="17" style="height: 12.75pt;"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl121"> </td>
<td class="xl121"> </td>
<td class="xl143"> </td>
<td class="xl129"> </td>
<td class="xl122"> </td>
<td class="xl121"> </td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl119" height="19" style="height: 14.25pt;">12/20/13</td>
<td class="xl120">Buy</td>
<td align="right" class="xl120">3</td>
<td class="xl120"> Jan</td>
<td align="right" class="xl120">31</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$0.87</td>
<td align="right" class="xl121">-$261.00</td>
<td align="right" class="xl145">01/07/14</td>
<td align="right" class="xl146">$0.48</td>
<td class="xl147">closed</td>
<td align="right" class="xl121">-$117.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl119" height="19" style="height: 14.25pt;">12/20/13</td>
<td class="xl120">Sell</td>
<td align="right" class="xl120">-3</td>
<td class="xl120"> Jan</td>
<td align="right" class="xl120">29</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$0.27</td>
<td align="right" class="xl121">$81.00</td>
<td class="xl140">expired</td>
<td align="right" class="xl142">$0.00</td>
<td class="xl122"> </td>
<td align="right" class="xl121">$81.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">12/20/13</td>
<td class="xl120">Sell</td>
<td align="right" class="xl120">-3 </td>
<td class="xl120">Jan</td>
<td align="right" class="xl120">29</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$0.27</td>
<td align="right" class="xl121">$81.00</td>
<td align="right" class="xl145">01/07/14</td>
<td align="right" class="xl146">$0.08</td>
<td class="xl147">closed</td>
<td align="right" class="xl121">$57.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">12/20/13</td>
<td class="xl120">Buy</td>
<td align="right" class="xl120">3</td>
<td class="xl120"> Jan</td>
<td align="right" class="xl120">27</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$0.11</td>
<td align="right" class="xl121">-$33.00</td>
<td class="xl140">expired</td>
<td align="right" class="xl142">$0.00</td>
<td class="xl122"> </td>
<td align="right" class="xl121">-$33.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl121"> </td>
<td class="xl121"> </td>
<td class="xl143"> </td>
<td class="xl129"> </td>
<td class="xl122"> </td>
<td class="xl121"> </td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">01/07/14</td>
<td class="xl120">Buy</td>
<td align="right" class="xl120">3</td>
<td class="xl120"> Feb</td>
<td align="right" class="xl120">32</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$1.41</td>
<td align="right" class="xl121">-$423.00</td>
<td align="right" class="xl145">01/21/14</td>
<td align="right" class="xl146">$0.55</td>
<td class="xl147">closed</td>
<td align="right" class="xl121">-$258.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">01/07/14</td>
<td class="xl120">Sell</td>
<td align="right" class="xl120">-3</td>
<td class="xl120"> Feb</td>
<td align="right" class="xl120">30</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$0.56</td>
<td align="right" class="xl121">$168.00</td>
<td align="right" class="xl145">01/21/14</td>
<td align="right" class="xl146">$0.14</td>
<td class="xl147">closed</td>
<td align="right" class="xl121">$126.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">01/07/14</td>
<td class="xl120">Sell</td>
<td align="right" class="xl120">-3</td>
<td class="xl120"> Feb</td>
<td align="right" class="xl120">30</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$0.56</td>
<td align="right" class="xl121">$168.00</td>
<td class="xl143"> </td>
<td align="right" class="xl150">$0.370</td>
<td class="xl122"> </td>
<td align="right" class="xl121">$57.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">01/07/14</td>
<td class="xl120">Buy</td>
<td align="right" class="xl120">3</td>
<td class="xl120"> Feb</td>
<td align="right" class="xl120">28</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$0.21</td>
<td align="right" class="xl121">-$63.00</td>
<td class="xl143"> </td>
<td align="right" class="xl150">$0.085</td>
<td class="xl122"> </td>
<td align="right" class="xl121">-$37.50</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl121"> </td>
<td class="xl121"> </td>
<td class="xl143"> </td>
<td class="xl141"> </td>
<td class="xl122"> </td>
<td class="xl121"> </td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">01/23/14</td>
<td class="xl120">Buy</td>
<td align="right" class="xl120">6</td>
<td class="xl120"> Feb</td>
<td align="right" class="xl120">32</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$1.06</td>
<td align="right" class="xl121">-$636.00</td>
<td class="xl143"> </td>
<td align="right" class="xl129">$1.96</td>
<td class="xl122"> </td>
<td align="right" class="xl121">$537.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">01/23/14</td>
<td class="xl120">Sell</td>
<td align="right" class="xl120">-12</td>
<td class="xl120"> Feb</td>
<td align="right" class="xl120">30</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$0.27</td>
<td align="right" class="xl121">$324.00</td>
<td class="xl143"> </td>
<td align="right" class="xl129">$0.77</td>
<td class="xl122"> </td>
<td align="right" class="xl121">-$600.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">01/23/14</td>
<td class="xl120">Buy</td>
<td align="right" class="xl120">6</td>
<td class="xl120"> Feb</td>
<td align="right" class="xl120">28</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$0.07</td>
<td align="right" class="xl121">-$42.00</td>
<td class="xl143"> </td>
<td align="right" class="xl129">$0.22</td>
<td class="xl122"> </td>
<td align="right" class="xl121">$87.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl121"> </td>
<td class="xl121"> </td>
<td class="xl143"> </td>
<td class="xl129"> </td>
<td class="xl122"> </td>
<td class="xl121"> </td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">01/24/14</td>
<td class="xl120">Buy</td>
<td align="right" class="xl120">3</td>
<td class="xl120"> Feb</td>
<td align="right" class="xl120">32</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$1.84</td>
<td align="right" class="xl121">-$552.00</td>
<td class="xl143"> </td>
<td align="right" class="xl129">$1.96</td>
<td class="xl122"> </td>
<td align="right" class="xl121">$34.50</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">01/24/14</td>
<td class="xl120">Sell</td>
<td align="right" class="xl120">-6</td>
<td class="xl120"> Feb</td>
<td align="right" class="xl120">30</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$0.66</td>
<td align="right" class="xl121">$396.00</td>
<td class="xl143"> </td>
<td align="right" class="xl129">$0.77</td>
<td class="xl122"> </td>
<td align="right" class="xl121">-$66.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl119" height="17" style="height: 12.75pt;">01/24/14</td>
<td class="xl120">Buy</td>
<td align="right" class="xl120">3</td>
<td class="xl120"> Feb</td>
<td align="right" class="xl120">26</td>
<td class="xl120">Put</td>
<td align="right" class="xl121">$0.02</td>
<td align="right" class="xl121">-$6.00</td>
<td class="xl143"> </td>
<td align="right" class="xl129">$0.06</td>
<td class="xl122"> </td>
<td align="right" class="xl121">$12.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl117" colspan="3" height="21" style="height: 15.75pt; mso-ignore: colspan;">*Underlying
Open Share Price</td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl113"></td>
<td class="xl115"> </td>
<td class="xl113"></td>
<td class="xl114"></td>
<td class="xl114"></td>
<td class="xl137"> </td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="18" style="height: 13.5pt; mso-height-source: userset;">
<td class="xl117" height="18" style="height: 13.5pt;">29.61% IV @ open</td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl111" colspan="3">Initial Option Hedge =</td>
<td align="right" class="xl113">-$102.00</td>
<td class="xl113"></td>
<td class="xl135">O P&L=</td>
<td class="xl138"> </td>
<td align="right" class="xl139">-$495.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl110" height="17" style="height: 12.75pt;"></td>
<td class="xl152" colspan="6">TOTAL MS P&L
=</td>
<td align="right" class="xl136">-$495.00</td>
<td class="xl113"></td>
<td class="xl116"></td>
<td class="xl114"></td>
<td class="xl113"></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl107" height="21" style="height: 15.75pt;"><br /><br /><br /><br /><br /><br /></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td class="xl128" colspan="5">FOR ILLUSTRATION
PURPOSES ONLY!!!</td>
<td><br /><br /><br /></td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody></table>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 1083px;">
<colgroup><col style="mso-width-alt: 4205; mso-width-source: userset; width: 86pt;" width="115"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 1938; mso-width-source: userset; width: 40pt;" width="53"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 1645; mso-width-source: userset; width: 34pt;" width="45"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 2377; mso-width-source: userset; width: 49pt;" width="65"></col>
<col style="mso-width-alt: 2779; mso-width-source: userset; width: 57pt;" width="76"></col>
<col style="mso-width-alt: 2633; mso-width-source: userset; width: 54pt;" width="72"></col>
<col style="mso-width-alt: 2377; mso-width-source: userset; width: 49pt;" width="65"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 2779; mso-width-source: userset; width: 57pt;" width="76"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 3035; mso-width-source: userset; width: 62pt;" width="83"></col>
<col style="mso-width-alt: 2377; mso-width-source: userset; width: 49pt;" width="65"></col>
<col style="mso-width-alt: 1755; mso-width-source: userset; width: 36pt;" width="48"></col>
</colgroup><tbody>
<tr height="20" style="height: 15.0pt;">
<td class="xl119" height="20" style="height: 15.0pt; width: 86pt;" width="115">*UAL @~
$37.70</td>
<td class="xl152" colspan="5" style="width: 218pt;" width="290">UAL CIS COLLAR WITH
BUTTERFLY HEDGE</td>
<td class="xl110" style="width: 49pt;" width="65">Open</td>
<td class="xl112" style="width: 57pt;" width="76">Dollar Value </td>
<td class="xl133" style="width: 54pt;" width="72">01/21/14</td>
<td class="xl132" style="width: 49pt;" width="65">Current </td>
<td class="xl111" style="width: 48pt;" width="64"></td>
<td class="xl110" style="width: 57pt;" width="76">Net P&L</td>
<td class="xl126" colspan="2" style="mso-ignore: colspan; width: 110pt;" width="147"> UAL
Current Price:</td>
<td align="right" class="xl125" style="width: 49pt;" width="65">$46.13</td>
<td style="width: 36pt;" width="48"></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl113" height="19" style="height: 14.25pt;">12/12/13</td>
<td class="xl111">Buy</td>
<td align="right" class="xl111">2</td>
<td class="xl146"> Mar</td>
<td align="right" class="xl111">31</td>
<td class="xl111">Call</td>
<td align="right" class="xl114">$7.63</td>
<td align="right" class="xl120">-$1,526.00</td>
<td align="right" class="xl147">01/17/14</td>
<td align="right" class="xl148">$15.85</td>
<td class="xl149">closed</td>
<td align="right" class="xl120">$1,644.00</td>
<td class="xl106" colspan="2"> Current Avg. IV:</td>
<td align="right" class="xl127">42.96%</td>
<td></td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td class="xl113" height="20" style="height: 15.0pt;">12/12/13</td>
<td class="xl111">Buy</td>
<td align="right" class="xl111">2 </td>
<td class="xl146">Mar</td>
<td align="right" class="xl111">31</td>
<td class="xl111">Call</td>
<td align="right" class="xl114">$7.70</td>
<td align="right" class="xl120">-$1,540.00</td>
<td align="right" class="xl147">01/17/14</td>
<td align="right" class="xl148">$15.85</td>
<td class="xl149">closed</td>
<td align="right" class="xl120">$1,630.00</td>
<td class="xl135" colspan="4"> 1 σ move +/- to FEB
expiry: $51.60/ $40.68</td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl113" height="17" style="height: 12.75pt;">01/09/14</td>
<td class="xl111">Buy</td>
<td align="right" class="xl111">3 </td>
<td class="xl146">Jun</td>
<td align="right" class="xl111">48</td>
<td class="xl111">Call</td>
<td align="right" class="xl114">$4.00</td>
<td align="right" class="xl120">-$1,200.00</td>
<td class="xl145"> </td>
<td align="right" class="xl151">$4.050</td>
<td class="xl124"> </td>
<td align="right" class="xl120">$15.00</td>
<td class="xl109"></td>
<td></td>
<td class="xl128"> </td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl113" height="17" style="height: 12.75pt;">01/17/14</td>
<td class="xl111">Buy</td>
<td align="right" class="xl111">3</td>
<td class="xl146"> Jun</td>
<td align="right" class="xl111">49</td>
<td class="xl111">Call</td>
<td align="right" class="xl114">$4.65</td>
<td align="right" class="xl120">-$1,395.00</td>
<td class="xl145"> </td>
<td align="right" class="xl151">$3.675</td>
<td class="xl124"> </td>
<td align="right" class="xl120">-$292.50</td>
<td class="xl109"></td>
<td></td>
<td class="xl128"> </td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl107" height="17" style="height: 12.75pt;"></td>
<td class="xl111"></td>
<td class="xl111"></td>
<td class="xl111"></td>
<td class="xl111"></td>
<td class="xl111"></td>
<td class="xl114"></td>
<td class="xl114"></td>
<td class="xl145"> </td>
<td class="xl131"> </td>
<td class="xl124"> </td>
<td class="xl114"></td>
<td class="xl109"></td>
<td></td>
<td class="xl128"> </td>
<td class="xl129"></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl121" height="19" style="height: 14.25pt;">12/12/13</td>
<td class="xl122">Sell</td>
<td align="right" class="xl122">-2</td>
<td class="xl122"> Jan</td>
<td align="right" class="xl122">40</td>
<td class="xl122">Call</td>
<td align="right" class="xl123">$0.81</td>
<td align="right" class="xl123">$162.00</td>
<td align="right" class="xl147">01/17/14</td>
<td align="right" class="xl148">$7.19</td>
<td class="xl149">closed</td>
<td align="right" class="xl123">-$1,276.00</td>
<td class="xl109"></td>
<td></td>
<td class="xl128"> </td>
<td class="xl129"></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl121" height="17" style="height: 12.75pt;">12/12/13</td>
<td class="xl122">Sell</td>
<td align="right" class="xl122">-2</td>
<td class="xl122"> Jan</td>
<td align="right" class="xl122">40</td>
<td class="xl122">Call</td>
<td align="right" class="xl123">$0.89</td>
<td align="right" class="xl123">$178.00</td>
<td align="right" class="xl147">01/17/14</td>
<td align="right" class="xl148">$6.85</td>
<td class="xl149">closed</td>
<td align="right" class="xl123">-$1,192.00</td>
<td class="xl109"></td>
<td></td>
<td class="xl128"> </td>
<td class="xl129"></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl121" height="17" style="height: 12.75pt;">12/12/13</td>
<td class="xl122">Sell</td>
<td align="right" class="xl122">-1</td>
<td class="xl122"> Jan</td>
<td align="right" class="xl122">40</td>
<td class="xl122">Call</td>
<td align="right" class="xl123">$0.89</td>
<td align="right" class="xl123">$89.00</td>
<td align="right" class="xl147">01/03/14</td>
<td align="right" class="xl148">$1.12</td>
<td class="xl149">closed</td>
<td align="right" class="xl123">-$23.00</td>
<td class="xl109"></td>
<td></td>
<td class="xl128"> </td>
<td class="xl129"></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl121" height="17" style="height: 12.75pt;">01/03/14</td>
<td class="xl122">Sell</td>
<td align="right" class="xl122">-1</td>
<td class="xl122"> Feb</td>
<td align="right" class="xl122">43</td>
<td class="xl122">Call</td>
<td align="right" class="xl123">$1.16</td>
<td align="right" class="xl123">$116.00</td>
<td class="xl145"> </td>
<td align="right" class="xl151">$3.975</td>
<td class="xl124"> </td>
<td align="right" class="xl123">-$281.50</td>
<td class="xl109"></td>
<td></td>
<td class="xl128"> </td>
<td class="xl129"></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl121" height="17" style="height: 12.75pt;">01/09/14</td>
<td class="xl122">Sell</td>
<td align="right" class="xl122">-2</td>
<td class="xl122"> Mar</td>
<td align="right" class="xl122">50</td>
<td class="xl122">Call</td>
<td align="right" class="xl123">$1.75</td>
<td align="right" class="xl123">$350.00</td>
<td class="xl145"> </td>
<td align="right" class="xl151">$1.425</td>
<td class="xl124"> </td>
<td align="right" class="xl123">$65.00</td>
<td class="xl109"></td>
<td></td>
<td class="xl128"> </td>
<td class="xl129"></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl121" height="17" style="height: 12.75pt;">01/17/14</td>
<td class="xl122">Sell</td>
<td align="right" class="xl122">-2</td>
<td class="xl122"> Feb</td>
<td align="right" class="xl122">40</td>
<td class="xl122">Call</td>
<td align="right" class="xl123">$7.59</td>
<td align="right" class="xl123">$1,518.00</td>
<td align="right" class="xl147">01/17/14</td>
<td align="right" class="xl148">$7.25</td>
<td class="xl149">closed</td>
<td align="right" class="xl123">$68.00</td>
<td class="xl109"></td>
<td></td>
<td class="xl128"> </td>
<td class="xl129"></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl121" height="17" style="height: 12.75pt;">01/17/14</td>
<td class="xl122">Sell</td>
<td align="right" class="xl122">-4</td>
<td class="xl122"> Feb</td>
<td align="right" class="xl122">50</td>
<td class="xl122">Call</td>
<td align="right" class="xl123">$1.30</td>
<td align="right" class="xl123">$520.00</td>
<td class="xl145"> </td>
<td align="right" class="xl151">$0.695</td>
<td class="xl124"> </td>
<td align="right" class="xl123">$242.00</td>
<td class="xl109"></td>
<td></td>
<td class="xl128"> </td>
<td class="xl129"></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl121" height="17" style="height: 12.75pt;"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl123"> </td>
<td class="xl123"> </td>
<td class="xl145"> </td>
<td class="xl131"> </td>
<td class="xl124"> </td>
<td class="xl123"> </td>
<td class="xl109"></td>
<td></td>
<td class="xl128"> </td>
<td class="xl129"></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl121" height="19" style="height: 14.25pt;">12/12/13</td>
<td class="xl122">Buy</td>
<td align="right" class="xl122">2</td>
<td class="xl122"> Jan</td>
<td align="right" class="xl122">38</td>
<td class="xl122">Put</td>
<td align="right" class="xl123">$2.01</td>
<td align="right" class="xl123">-$402.00</td>
<td align="right" class="xl147">01/07/14</td>
<td align="right" class="xl148">$0.54</td>
<td class="xl149">closed</td>
<td align="right" class="xl123">-$294.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl121" height="19" style="height: 14.25pt;">12/12/13</td>
<td class="xl122">Sell</td>
<td align="right" class="xl122">-2</td>
<td class="xl122"> Jan</td>
<td align="right" class="xl122">35</td>
<td class="xl122">Put</td>
<td align="right" class="xl150">$0.755</td>
<td align="right" class="xl123">$151.00</td>
<td align="right" class="xl147">01/07/14</td>
<td align="right" class="xl148">$0.10</td>
<td class="xl149">closed</td>
<td align="right" class="xl123">$131.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl121" height="19" style="height: 14.25pt;">12/12/13</td>
<td class="xl122">Sell</td>
<td align="right" class="xl122">-2</td>
<td class="xl122"> Jan</td>
<td align="right" class="xl122">35</td>
<td class="xl122">Put</td>
<td align="right" class="xl123">$0.70</td>
<td align="right" class="xl123">$140.00</td>
<td class="xl142">expired</td>
<td align="right" class="xl144">$0.00</td>
<td class="xl124"> </td>
<td align="right" class="xl123">$140.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl121" height="19" style="height: 14.25pt;">12/12/13</td>
<td class="xl122">Buy</td>
<td align="right" class="xl122">2</td>
<td class="xl122"> Jan</td>
<td align="right" class="xl122">32</td>
<td class="xl122">Put</td>
<td align="right" class="xl123">$0.27</td>
<td align="right" class="xl123">-$54.00</td>
<td class="xl142">expired</td>
<td align="right" class="xl144">$0.00</td>
<td class="xl124"> </td>
<td align="right" class="xl123">-$54.00</td>
<td></td>
<td></td>
<td></td>
<td class="xl118"></td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl121" height="17" style="height: 12.75pt;"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl123"> </td>
<td class="xl123"> </td>
<td class="xl145"> </td>
<td class="xl131"> </td>
<td class="xl124"> </td>
<td class="xl123"> </td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl121" height="19" style="height: 14.25pt;">12/12/13</td>
<td class="xl122">Buy</td>
<td align="right" class="xl122">2</td>
<td class="xl122"> Jan</td>
<td align="right" class="xl122">38</td>
<td class="xl122">Put</td>
<td align="right" class="xl123">$1.89</td>
<td align="right" class="xl123">-$378.00</td>
<td align="right" class="xl147">01/07/14</td>
<td align="right" class="xl148">$0.54</td>
<td class="xl149">closed</td>
<td align="right" class="xl123">-$270.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl121" height="19" style="height: 14.25pt;">12/12/13</td>
<td class="xl122">Sell</td>
<td align="right" class="xl122">-2</td>
<td class="xl122"> Jan</td>
<td align="right" class="xl122">35</td>
<td class="xl122">Put</td>
<td align="right" class="xl123">$0.70</td>
<td align="right" class="xl123">$140.00</td>
<td align="right" class="xl147">01/07/14</td>
<td align="right" class="xl148">$0.10</td>
<td class="xl149">closed</td>
<td align="right" class="xl123">$120.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl121" height="19" style="height: 14.25pt;">12/12/13</td>
<td class="xl122">Sell</td>
<td align="right" class="xl122">-2</td>
<td class="xl122"> Jan</td>
<td align="right" class="xl122">35</td>
<td class="xl122">Put</td>
<td align="right" class="xl123">$0.70</td>
<td align="right" class="xl123">$140.00</td>
<td class="xl142">expired</td>
<td align="right" class="xl144">$0.00</td>
<td class="xl124"> </td>
<td align="right" class="xl123">$140.00</td>
<td></td>
<td></td>
<td></td>
<td class="xl108"></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl121" height="17" style="height: 12.75pt;">12/12/13</td>
<td class="xl122">Buy</td>
<td align="right" class="xl122">2</td>
<td class="xl122"> Jan</td>
<td align="right" class="xl122">32</td>
<td class="xl122">Put</td>
<td align="right" class="xl123">$0.26</td>
<td align="right" class="xl123">-$52.00</td>
<td class="xl142">expired</td>
<td align="right" class="xl144">$0.00</td>
<td class="xl124"> </td>
<td align="right" class="xl123">-$52.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl121" height="17" style="height: 12.75pt;"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl123"> </td>
<td class="xl123"> </td>
<td class="xl145"> </td>
<td class="xl143"> </td>
<td class="xl124"> </td>
<td class="xl123"> </td>
<td></td>
<td></td>
<td></td>
<td class="xl108"></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl121" height="17" style="height: 12.75pt;">01/07/14</td>
<td class="xl122">Buy</td>
<td align="right" class="xl122">4</td>
<td class="xl122"> Feb</td>
<td align="right" class="xl122">40</td>
<td class="xl122">Put</td>
<td align="right" class="xl123">$2.69</td>
<td align="right" class="xl123">-$1,076.00</td>
<td class="xl145"> </td>
<td align="right" class="xl151">$0.325</td>
<td class="xl124"> </td>
<td align="right" class="xl123">-$946.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl121" height="17" style="height: 12.75pt;">01/07/14</td>
<td class="xl122">Sell</td>
<td align="right" class="xl122">-8 </td>
<td class="xl122">Feb</td>
<td align="right" class="xl122">37</td>
<td class="xl122">Put</td>
<td align="right" class="xl150">$1.275</td>
<td align="right" class="xl123">$1,020.00</td>
<td class="xl145"> </td>
<td align="right" class="xl151">$0.120</td>
<td class="xl124"> </td>
<td align="right" class="xl123">$924.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="18" style="height: 13.5pt; mso-height-source: userset;">
<td class="xl121" height="18" style="height: 13.5pt;">01/07/14</td>
<td class="xl122">Buy</td>
<td align="right" class="xl122">4</td>
<td class="xl122"> Feb</td>
<td align="right" class="xl122">34</td>
<td class="xl122">Put</td>
<td align="right" class="xl123">$0.52</td>
<td align="right" class="xl123">-$208.00</td>
<td class="xl145"> </td>
<td align="right" class="xl151">$0.050</td>
<td class="xl124"> </td>
<td align="right" class="xl123">-$188.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="18" style="height: 13.5pt; mso-height-source: userset;">
<td class="xl121" height="18" style="height: 13.5pt;"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl122"> </td>
<td class="xl123"> </td>
<td class="xl123"> </td>
<td class="xl145"> </td>
<td class="xl151"> </td>
<td class="xl124"> </td>
<td class="xl123"> </td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="18" style="height: 13.5pt; mso-height-source: userset;">
<td class="xl121" height="18" style="height: 13.5pt;">01/07/14</td>
<td class="xl122">Buy</td>
<td align="right" class="xl122">4</td>
<td class="xl122"> Feb</td>
<td align="right" class="xl122">48</td>
<td class="xl122">Put</td>
<td align="right" class="xl123">$2.69</td>
<td align="right" class="xl123">-$1,076.00</td>
<td class="xl145"> </td>
<td align="right" class="xl151">$3.150</td>
<td class="xl124"> </td>
<td align="right" class="xl123">$184.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="18" style="height: 13.5pt; mso-height-source: userset;">
<td class="xl121" height="18" style="height: 13.5pt;">01/07/14</td>
<td class="xl122">Sell</td>
<td align="right" class="xl122">-8 </td>
<td class="xl122">Feb</td>
<td align="right" class="xl122">44</td>
<td class="xl122">Put</td>
<td align="right" class="xl150">$1.075</td>
<td align="right" class="xl123">$860.00</td>
<td class="xl145"> </td>
<td align="right" class="xl151">$1.160</td>
<td class="xl124"> </td>
<td align="right" class="xl123">-$68.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="18" style="height: 13.5pt; mso-height-source: userset;">
<td class="xl121" height="18" style="height: 13.5pt;">01/07/14</td>
<td class="xl122">Buy</td>
<td align="right" class="xl122">4</td>
<td class="xl122"> Feb</td>
<td align="right" class="xl122">40</td>
<td class="xl122">Put</td>
<td align="right" class="xl123">$0.41</td>
<td align="right" class="xl123">-$164.00</td>
<td class="xl145"> </td>
<td align="right" class="xl151">$0.325</td>
<td class="xl124"> </td>
<td align="right" class="xl123">-$34.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="18" style="height: 13.5pt; mso-height-source: userset;">
<td class="xl119" colspan="3" height="18" style="height: 13.5pt; mso-ignore: colspan;">*Underlying
Open Share Price</td>
<td class="xl111"></td>
<td class="xl111"></td>
<td class="xl111"></td>
<td class="xl114"></td>
<td class="xl116"> </td>
<td class="xl114"></td>
<td class="xl115"></td>
<td class="xl115"></td>
<td class="xl139"> </td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl119" height="21" style="height: 15.75pt;">41.02% IV @ open</td>
<td class="xl111"></td>
<td class="xl111"></td>
<td class="xl111"></td>
<td class="xl112" colspan="3">Initial Option Hedge =</td>
<td align="right" class="xl114">$1,974.00</td>
<td class="xl114"></td>
<td class="xl137">O P&L=</td>
<td class="xl140"> </td>
<td align="right" class="xl141">$332.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl111" height="17" style="height: 12.75pt;"></td>
<td class="xl153" colspan="6">TOTAL UAL P&L
=</td>
<td align="right" class="xl138">$332.00</td>
<td class="xl114"></td>
<td class="xl117"></td>
<td class="xl115"></td>
<td class="xl114"></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl107" height="21" style="height: 15.75pt;"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td class="xl130" colspan="5">FOR ILLUSTRATION
PURPOSES ONLY!!!</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody></table>
<div>
<br /></div>
<div>
<br /></div>
<div>
<br /></div>
<div>
<br /></div>
<div>
<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 1091px;">
<colgroup><col style="mso-width-alt: 4205; mso-width-source: userset; width: 86pt;" width="115"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 1865; mso-width-source: userset; width: 38pt;" width="51"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 1718; mso-width-source: userset; width: 35pt;" width="47"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 2377; mso-width-source: userset; width: 49pt;" width="65"></col>
<col style="mso-width-alt: 2779; mso-width-source: userset; width: 57pt;" width="76"></col>
<col style="mso-width-alt: 2633; mso-width-source: userset; width: 54pt;" width="72"></col>
<col style="mso-width-alt: 2377; mso-width-source: userset; width: 49pt;" width="65"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 2779; mso-width-source: userset; width: 57pt;" width="76"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 3035; mso-width-source: userset; width: 62pt;" width="83"></col>
<col style="mso-width-alt: 2377; mso-width-source: userset; width: 49pt;" width="65"></col>
<col style="mso-width-alt: 2048; mso-width-source: userset; width: 42pt;" width="56"></col>
</colgroup><tbody>
<tr height="60" style="height: 45.0pt;">
<td class="xl146" height="60" style="height: 45.0pt; width: 86pt;" width="115">*YHOO @~
$35.27 & $39.05 / $37.92</td>
<td class="xl148" colspan="5" style="width: 217pt;" width="290">YHOO CIS COLLAR WITH
BUTTERFLY HEDGE</td>
<td class="xl109" style="width: 49pt;" width="65">Open</td>
<td class="xl111" style="width: 57pt;" width="76">Dollar Value</td>
<td class="xl130" style="width: 54pt;" width="72">01/21/14</td>
<td class="xl129" style="width: 49pt;" width="65">Current </td>
<td class="xl110" style="width: 48pt;" width="64"></td>
<td class="xl110" style="width: 57pt;" width="76">Net P&L</td>
<td class="xl124" colspan="2" style="mso-ignore: colspan; width: 110pt;" width="147"> YHOO
Current Price:</td>
<td align="right" class="xl123" style="width: 49pt;" width="65">$37.91</td>
<td style="width: 42pt;" width="56"></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl112" height="19" style="height: 14.25pt;">11/20/13</td>
<td class="xl110">Buy</td>
<td align="right" class="xl110">2</td>
<td class="xl142"> Feb 14</td>
<td align="right" class="xl110">30</td>
<td class="xl110">Call</td>
<td align="right" class="xl113">$6.05</td>
<td align="right" class="xl117">-$1,210.00</td>
<td align="right" class="xl143">12/18/13</td>
<td align="right" class="xl144">$9.20</td>
<td class="xl145">closed</td>
<td align="right" class="xl117">$630.00</td>
<td class="xl106" colspan="2"> Current IV:</td>
<td align="right" class="xl125">41.44%</td>
<td></td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td class="xl112" height="20" style="height: 15.0pt;">12/05/13</td>
<td class="xl110">Buy</td>
<td align="right" class="xl110">2</td>
<td class="xl142"> Mar 14</td>
<td align="right" class="xl110">34</td>
<td class="xl110">Call</td>
<td align="right" class="xl113">$6.15</td>
<td align="right" class="xl117">-$1,230.00</td>
<td class="xl140"> </td>
<td align="right" class="xl147">$4.800</td>
<td class="xl121"> </td>
<td align="right" class="xl117">- $270.00 </td>
<td class="xl132" colspan="4"> 1 σ move +/- to FEB
expiry: $42.25/ $33.59</td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl112" height="17" style="height: 12.75pt;">01/24/14</td>
<td class="xl110">Buy</td>
<td align="right" class="xl110">2</td>
<td class="xl142"> Apr</td>
<td align="right" class="xl110">33</td>
<td class="xl110">Call</td>
<td align="right" class="xl113">$5.95</td>
<td align="right" class="xl117">-$1,190.00</td>
<td class="xl140"> </td>
<td align="right" class="xl147">$5.975</td>
<td class="xl121"> </td>
<td align="right" class="xl117">$5.00</td>
<td class="xl108"></td>
<td></td>
<td class="xl126"> </td>
<td class="xl127"></td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl107" height="17" style="height: 12.75pt;"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl113"></td>
<td class="xl113"></td>
<td class="xl140"> </td>
<td class="xl128"> </td>
<td class="xl121"> </td>
<td class="xl113"></td>
<td class="xl108"></td>
<td></td>
<td class="xl126"> </td>
<td class="xl127"></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl118" height="19" style="height: 14.25pt;">11/20/13</td>
<td class="xl119">Sell</td>
<td align="right" class="xl119">-2</td>
<td class="xl119"> Dec</td>
<td align="right" class="xl119">37</td>
<td class="xl119">Call</td>
<td align="right" class="xl120">$0.65</td>
<td align="right" class="xl120">$130.00</td>
<td align="right" class="xl143">12/18/13</td>
<td align="right" class="xl144">$2.03</td>
<td class="xl145">closed</td>
<td align="right" class="xl120">-$276.00</td>
<td class="xl108"></td>
<td></td>
<td class="xl126"> </td>
<td class="xl127"></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl118" height="19" style="height: 14.25pt;">12/05/13</td>
<td class="xl119">Sell</td>
<td align="right" class="xl119">-2</td>
<td class="xl119"> Jan</td>
<td align="right" class="xl119">41</td>
<td class="xl119">Call</td>
<td align="right" class="xl120">$0.90</td>
<td align="right" class="xl120">$180.00</td>
<td align="right" class="xl143">01/07/14</td>
<td align="right" class="xl144">$0.70</td>
<td class="xl145">closed</td>
<td align="right" class="xl120">$40.00</td>
<td class="xl108"></td>
<td></td>
<td class="xl126"> </td>
<td class="xl127"></td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl118" height="17" style="height: 12.75pt;">01/07/14</td>
<td class="xl119">Sell</td>
<td align="right" class="xl119">-2 </td>
<td class="xl119">Feb</td>
<td align="right" class="xl119">44</td>
<td class="xl119">Call</td>
<td align="right" class="xl120">$0.97</td>
<td align="right" class="xl120">$194.00</td>
<td class="xl140"> </td>
<td align="right" class="xl147">$0.390</td>
<td class="xl121"> </td>
<td align="right" class="xl120">$116.00</td>
<td class="xl108"></td>
<td></td>
<td class="xl126"> </td>
<td class="xl127"></td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl122" height="17" style="height: 12.75pt;"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl140"> </td>
<td class="xl128"> </td>
<td class="xl121"> </td>
<td class="xl120"> </td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl118" height="19" style="height: 14.25pt;">11/20/13</td>
<td class="xl119">Buy</td>
<td align="right" class="xl119">2</td>
<td class="xl119"> Dec</td>
<td align="right" class="xl119">36</td>
<td class="xl119">Put</td>
<td align="right" class="xl120">$1.67</td>
<td align="right" class="xl120">-$334.00 </td>
<td class="xl138">expired</td>
<td align="right" class="xl139">$0.00</td>
<td class="xl121"> </td>
<td align="right" class="xl120">-$334.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl118" height="19" style="height: 14.25pt;">11/20/13</td>
<td class="xl119">Sell</td>
<td align="right" class="xl119">-4</td>
<td class="xl119"> Dec</td>
<td align="right" class="xl119">34</td>
<td class="xl119">Put</td>
<td align="right" class="xl120">$0.68</td>
<td align="right" class="xl120">$272.00</td>
<td class="xl138"> expired</td>
<td align="right" class="xl139">$0.00</td>
<td class="xl121"> </td>
<td align="right" class="xl120">$272.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl118" height="17" style="height: 12.75pt;">11/20/13</td>
<td class="xl119">Buy</td>
<td align="right" class="xl119">2</td>
<td class="xl119"> Dec</td>
<td align="right" class="xl119">32</td>
<td class="xl119">Put</td>
<td align="right" class="xl120">$0.21</td>
<td align="right" class="xl120">-$42.00</td>
<td class="xl138"> expired</td>
<td align="right" class="xl139">$0.00</td>
<td class="xl121"> </td>
<td align="right" class="xl120">-$42.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl118" height="17" style="height: 12.75pt;"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl140"> </td>
<td class="xl128"> </td>
<td class="xl121"> </td>
<td class="xl120"> </td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl118" height="17" style="height: 12.75pt;">12/05/13</td>
<td class="xl119">Buy</td>
<td align="right" class="xl119">2</td>
<td class="xl119"> Jan</td>
<td align="right" class="xl119">40</td>
<td class="xl119">Put</td>
<td align="right" class="xl120">$2.24</td>
<td align="right" class="xl120">-$448.00</td>
<td align="right" class="xl143">01/06/14</td>
<td align="right" class="xl144">$0.75</td>
<td class="xl145">closed</td>
<td align="right" class="xl120">-$298.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl118" height="17" style="height: 12.75pt;">12/05/13</td>
<td class="xl119">Sell</td>
<td align="right" class="xl119">-4</td>
<td class="xl119"> Jan</td>
<td align="right" class="xl119">37</td>
<td class="xl119">Put</td>
<td align="right" class="xl120">$0.88</td>
<td align="right" class="xl120">$352.00</td>
<td align="right" class="xl143">01/07/14</td>
<td align="right" class="xl144">$0.02</td>
<td class="xl145">closed</td>
<td align="right" class="xl120">$344.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl118" height="17" style="height: 12.75pt;">12/05/13</td>
<td class="xl119">Buy</td>
<td align="right" class="xl119">2</td>
<td class="xl119"> Jan</td>
<td align="right" class="xl119">34</td>
<td class="xl119">Put</td>
<td align="right" class="xl120">$0.29</td>
<td align="right" class="xl120">-$58.00</td>
<td class="xl138"> expired</td>
<td align="right" class="xl139">$0.00</td>
<td class="xl121"> </td>
<td align="right" class="xl120">-$58.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl118" height="17" style="height: 12.75pt;"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl141"> </td>
<td class="xl128"> </td>
<td class="xl121"> </td>
<td class="xl120"> </td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl118" height="17" style="height: 12.75pt;">01/06/14</td>
<td class="xl119">Buy</td>
<td align="right" class="xl119">2</td>
<td class="xl119"> Feb</td>
<td align="right" class="xl119">41</td>
<td class="xl119">Put</td>
<td align="right" class="xl120">$2.61</td>
<td align="right" class="xl120">-$522.00</td>
<td class="xl140"> </td>
<td align="right" class="xl147">$3.750</td>
<td class="xl121"> </td>
<td align="right" class="xl120">$228.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl118" height="17" style="height: 12.75pt;">01/06/14</td>
<td class="xl119">Sell</td>
<td align="right" class="xl119">-2</td>
<td class="xl119"> Feb</td>
<td align="right" class="xl119">38</td>
<td class="xl119">Put</td>
<td align="right" class="xl120">$1.14</td>
<td align="right" class="xl120">$227.00</td>
<td class="xl140"> </td>
<td align="right" class="xl147">$1.735</td>
<td class="xl121"> </td>
<td align="right" class="xl120">-$120.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl118" height="17" style="height: 12.75pt;">01/06/14</td>
<td class="xl119">Sell</td>
<td align="right" class="xl119">-2</td>
<td class="xl119"> Feb</td>
<td align="right" class="xl119">38</td>
<td class="xl119">Put</td>
<td align="right" class="xl120">$1.14</td>
<td align="right" class="xl120">$227.00</td>
<td align="right" class="xl143">01/24/14</td>
<td align="right" class="xl144">$1.72</td>
<td class="xl145">closed</td>
<td align="right" class="xl120">-$117.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl118" height="17" style="height: 12.75pt;">01/06/14</td>
<td class="xl119">Buy</td>
<td align="right" class="xl119">2</td>
<td class="xl119"> Feb</td>
<td align="right" class="xl119">35</td>
<td class="xl119">Put</td>
<td align="right" class="xl120">$0.39</td>
<td align="right" class="xl120">-$78.00</td>
<td class="xl140"> </td>
<td align="right" class="xl147">$0.545</td>
<td class="xl121"> </td>
<td align="right" class="xl120">$31.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl118" height="17" style="height: 12.75pt;"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl119"> </td>
<td class="xl120"> </td>
<td class="xl120"> </td>
<td class="xl141"> </td>
<td class="xl147"> </td>
<td class="xl121"> </td>
<td class="xl120"> </td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt; mso-height-source: userset;">
<td class="xl118" height="17" style="height: 12.75pt;">01/24/14</td>
<td class="xl119">Sell</td>
<td align="right" class="xl119">-4</td>
<td class="xl119"> Feb</td>
<td align="right" class="xl119">36</td>
<td class="xl119">Put</td>
<td align="right" class="xl120">$0.82</td>
<td align="right" class="xl120">$328.00</td>
<td class="xl140"> </td>
<td align="right" class="xl147">$0.855</td>
<td class="xl121"> </td>
<td align="right" class="xl120">-$14.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl118" height="17" style="height: 12.75pt;">01/24/14</td>
<td class="xl119">Buy</td>
<td align="right" class="xl119">2</td>
<td class="xl119"> Feb</td>
<td align="right" class="xl119">34</td>
<td class="xl119">Put</td>
<td align="right" class="xl120">$0.31</td>
<td align="right" class="xl120">-$62.00</td>
<td class="xl140"> </td>
<td align="right" class="xl147">$0.325</td>
<td class="xl121"> </td>
<td align="right" class="xl120">$3.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl116" colspan="3" height="21" style="height: 15.75pt; mso-ignore: colspan;">*Underlying
Open Long Call Price</td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl113"></td>
<td class="xl115"> </td>
<td class="xl113"></td>
<td class="xl114"></td>
<td class="xl114"></td>
<td class="xl135"> </td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl116" colspan="2" height="21" style="height: 15.75pt; mso-ignore: colspan;">32.17%
IV @ open 11/20/13</td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl111" colspan="3">Initial Option Hedge =</td>
<td align="right" class="xl113">$100.00</td>
<td class="xl113"></td>
<td class="xl134">O P&L=</td>
<td class="xl136"> </td>
<td align="right" class="xl137">$151.00</td>
<td><br /><br /></td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody></table>
</div>
<div>
<br /></div>
<div>
<b>Remember that option trading is risky business. Become knowledgeable and paper trade before using real capital!! All material in this blog is for illustration purposes only.</b></div>
<div>
Happy Trading & God Bless!</div>
<div>
H2Options</div>
H2Optionshttp://www.blogger.com/profile/17866211551152350212noreply@blogger.com0tag:blogger.com,1999:blog-933973642078676685.post-53951996617763672822014-01-25T19:00:00.002-08:002014-01-25T19:00:28.271-08:00Trading Thoughts --- Week Ending January 24, 2014<div class="MsoNormal">
<span style="font-size: 13.5pt; line-height: 115%;">Hello
Fellow Traders! </span></div>
<div class="MsoNormal">
<span style="font-size: 13.5pt; line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-size: 13.5pt; line-height: 115%;">I know that it's been a very long time since I last posted on
this blog... with Stocktwits & Twitter I am able to post most of my trading
activity there, so please give H2Options a look. These social media sites are
pretty cool as they give me an opportunity to both journal my trading activity
and keep me honest on the decisions I make both good and bad. Hopefully
most of my decisions will be good ones as my livelihood depends on it!
This blog is nothing more than an extension to this... the main and
obvious difference is I have the opportunity to express my thoughts in greater
detail here on my blog.<span class="apple-converted-space"> <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span class="apple-converted-space"><span style="font-size: 13.5pt; line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span class="apple-converted-space"><span style="font-size: 13.5pt; line-height: 115%;">So, with that in mind, I want to begin by
stating that 2014 has gotten off to an interesting start to say the least. The weather, for one, is currently at extreme
cold temperatures, with even colder temperatures on the way… –25 below!! In contrast, the stock market has been on
quite a roll and to many it’s been too hot to touch. </span></span></div>
<div class="MsoNormal">
<span class="apple-converted-space"><span style="font-size: 13.5pt; line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span class="apple-converted-space"><span style="font-size: 13.5pt; line-height: 115%;">That sentiment may have begun to change on
January 24<sup>th</sup>, seeing the Dow drop over 300 points closing below
16,000 to 15,879. According to various
news reports I’ve seen, many investors have been waiting for a pull back in the
market before “pulling the trigger” on their funds. These folks have remained
in disbelief that the market is for real ever since the 2008 financial
meltdown. On the flipside, there are
those who have participated in the market run up, and are getting nervous and
have been looking for reasons to sell.
For me personally, I’m somewhere in between these two schools of
thought. I have steadily taken money off
the table throughout 2013 in my stock portfolio, as I was an aggressive buyer
in mid 2009. At this point I continue to
hold a well diversified portfolio of dividend paying stocks (~65%) and cash (~35%). My cash allocation is much higher than I use
to have before I became more knowledgeable about options. I use the cash portion for all of my option
trading activity as I believe options provide the most efficient use of one’s
capital given the leverage and flexibility it provides. </span></span></div>
<div class="MsoNormal">
<span class="apple-converted-space"><span style="font-size: 13.5pt; line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span class="apple-converted-space"><span style="font-size: 13.5pt; line-height: 115%;">As I gain more knowledge in trading options, I am
more inclined to allocate funds to these instruments. This way of thinking has become even more
apparent after the stock market sell-off the past two days. I’m convinced even
more the important role options can play in hedging one’s portfolio. Sure, my option portfolio took a hit, as it
is “net long”… however, the losses would have been much greater had I invested
my money solely in a stock or mutual fund.
As you probably know with stocks and mutual funds, you can only make
money on these instruments one way… they all must go up in value. However, with options you have the ability
and flexibility to make money if the underlying stock goes up, down or sideways. They really are fascinating instruments if
constructed WISELY. </span></span></div>
<div class="MsoNormal">
<span class="apple-converted-space"><span style="font-size: 13.5pt; line-height: 115%;"><br /></span></span></div>
<div class="MsoNormal">
<span class="apple-converted-space"><span style="font-size: 13.5pt; line-height: 115%;">As I say on my
Stocktwits profile: “I emphasize hedging ALWAYS.” I say this because there is option strategies
out there that are quite risky… for example, selling naked puts or uncovered
calls can be quite lucrative, but can be disastrous to one’s financial health
if the market moves against them severely.
I would assume this scenario played out for some on Friday! All of my option trade strategies are “hedged”.
This simply means that each strategy has defined risk parameters built in to
ensure that I know what the maximum loss will be on any given trade. That gives me great comfort, and I can sleep
at night. The drawback to options is
that in most of the trades I implement caps the upside or downside potential I
can make. To me, this is an acceptable
“drawback”, as the leverage feature of options in terms of the amount of
capital needed and the time frame involved (usually 20-90 days) is very
rewarding. <o:p></o:p></span></span></div>
<div class="MsoNormal">
<span class="apple-converted-space"><b><span style="font-size: 16pt; line-height: 115%;"><br /></span></b></span></div>
<div class="MsoNormal">
<span class="apple-converted-space"><b><span style="font-size: 16pt; line-height: 115%;">Current
Open Option Trades<o:p></o:p></span></b></span></div>
<table border="0" cellpadding="0" cellspacing="0" class="MsoNormalTable" style="border-collapse: collapse; margin-left: 5.4pt; mso-padding-alt: 0in 5.4pt 0in 5.4pt; mso-yfti-tbllook: 1184; width: 681px;">
<tbody>
<tr style="height: 13.5pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td nowrap="" style="height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"></td>
<td nowrap="" style="height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"></td>
<td nowrap="" style="height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"></td>
<td nowrap="" style="height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"></td>
<td nowrap="" style="background-position: initial initial; background-repeat: initial initial; border: 1pt solid windowtext; height: 13.5pt; padding: 0in 5.4pt; width: 0.75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<span style="color: cyan; font-family: Century, serif; font-size: x-small;"><span style="background-color: black;"><b><i>19</i></b></span></span></div>
</td>
<td style="height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Unrealized<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 25.5pt; mso-yfti-irow: 1;">
<td nowrap="" style="height: 25.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"></td>
<td nowrap="" style="height: 25.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Underlying Equity<o:p></o:p></span></i></b></div>
</td>
<td nowrap="" style="height: 25.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Option Strategy<o:p></o:p></span></i></b></div>
</td>
<td style="height: 25.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Date
Opened<o:p></o:p></span></i></b></div>
</td>
<td style="height: 25.5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">#
Days in Trade<o:p></o:p></span></i></b></div>
</td>
<td style="height: 25.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Current
Profit/Loss<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 2;">
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">1<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Apple (AAPL)<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Iron Condor<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">01/24/14<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">0<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">$22<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">2<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Akamai Tech. (AKAM)<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Double Calendar<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">01/21/14<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">3<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="background: #C00000; height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="color: white; font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">-$160<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 4;">
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">3<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Akamai Tech.#2 (AKAM)<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Double Calendar<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">01/21/14<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">3<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="background: #C00000; height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="color: white; font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">-$90<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 5;">
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">4<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Celgene (CELG)<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">1-3-2 Put Butterfly<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">01/13/14<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">11<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">$13<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 6;">
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">5<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Dow Chemical (DOW)<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Double Calendar<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">01/08/14<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">16<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="background: #C00000; height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="color: white; font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">-$49<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 7;">
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">6<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Ebay (EBAY)<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Double Calendar<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">12/31/13<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">24<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">$105<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 8;">
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">7<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Morgan Stanley (MS)<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">CIS Collar w/Put Butterfly Hedge<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">12/20/13<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">35<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="background: #C00000; height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="color: white; font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">-$495<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 9;">
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">8<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Russell 2000 (RUT)<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Iron Butterfly<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">01/15/14<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">9<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">$30<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 10;">
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">9<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Russell 2000 (RUT)<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Iron Butterfly<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">01/22/14<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">2<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="background: #C00000; height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="color: white; font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">-$126<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 11;">
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">10<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Scherwin Williams (SHW)<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Dbl Diagonal Calendar<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">01/03/14<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">21<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">$69<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 12;">
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">11<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">United Airlines (UAL)<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">CIS Collar w/Put Butterfly Hedge<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">12/12/13<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">43<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">$332<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 13;">
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">12<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Yahoo (YHOO)<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">CIS Collar w/Put Butterfly Hedge<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">11/20/13<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">65<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">$151<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 14;">
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">13<o:p></o:p></span></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Yahoo (YHOO)<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">Double Calendar<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">01/08/14<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">16<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="height: 12.75pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">$112<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 13.5pt; mso-yfti-irow: 15;">
<td nowrap="" style="height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"></td>
<td nowrap="" style="height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"></td>
<td nowrap="" style="height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 155.0pt;" valign="bottom" width="207"></td>
<td nowrap="" style="height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 68.0pt;" valign="bottom" width="91"></td>
<td nowrap="" style="height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: .75in;" valign="bottom" width="72"></td>
<td nowrap="" style="height: 13.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"></td>
</tr>
<tr style="height: 19.5pt; mso-yfti-irow: 16;">
<td nowrap="" style="height: 19.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"></td>
<td nowrap="" style="height: 19.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"></td>
<td colspan="3" nowrap="" style="height: 19.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 277.0pt;" valign="bottom" width="369"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 14.0pt; mso-fareast-font-family: "Times New Roman";">Current Open Options Gain / Loss:<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="border: solid windowtext 1.0pt; height: 19.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="font-family: "Arial","sans-serif"; font-size: 14.0pt; mso-fareast-font-family: "Times New Roman";">-$86<o:p></o:p></span></i></b></div>
</td>
</tr>
<tr style="height: 19.5pt; mso-yfti-irow: 17;">
<td nowrap="" style="height: 19.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"></td>
<td nowrap="" style="height: 19.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"></td>
<td colspan="3" nowrap="" style="height: 19.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 277.0pt;" valign="bottom" width="369"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 14.0pt; mso-fareast-font-family: "Times New Roman";">2014 Closed Option Trades Gain /
Loss:<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="border-top: none; border: solid windowtext 1.0pt; height: 19.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 65.0pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><span style="font-family: "Arial","sans-serif"; font-size: 14.0pt; mso-fareast-font-family: "Times New Roman";">$463<o:p></o:p></span></b></div>
</td>
</tr>
<tr style="height: 19.5pt; mso-yfti-irow: 18; mso-yfti-lastrow: yes;">
<td nowrap="" style="height: 19.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 24.0pt;" valign="bottom" width="32"></td>
<td nowrap="" style="height: 19.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 145.0pt;" valign="bottom" width="193"></td>
<td colspan="3" nowrap="" style="height: 19.5pt; padding: 0in 5.4pt 0in 5.4pt; width: 277.0pt;" valign="bottom" width="369"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<i><span style="font-family: "Arial","sans-serif"; font-size: 14.0pt; mso-fareast-font-family: "Times New Roman";">Total Open/Closed Option Trades
2014:<o:p></o:p></span></i></div>
</td>
<td nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-bottom-color: windowtext; border-bottom-width: 1pt; border-left-color: windowtext; border-left-width: 1pt; border-right-color: windowtext; border-right-width: 1pt; border-style: none solid solid; height: 19.5pt; padding: 0in 5.4pt; width: 65pt;" valign="bottom" width="87"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><i><span style="font-family: Arial, sans-serif; font-size: 14pt;"><span style="color: white;"><span style="background-color: black;">$377</span><span style="background-color: yellow;"><o:p></o:p></span></span></span></i></b></div>
</td>
</tr>
</tbody></table>
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<div class="MsoNormal">
<span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;">Trade #1
Apple Inc. (AAPL) Iron Condor Strategy </span></b></span></div>
<div class="MsoNormal">
<span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;"><a href="http://screencast.com/t/tZDr5wStTkvz">AAPL Trade# 1</a> </span></b></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 18pt; line-height: 115%;"><br /></span></b></span></div>
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<b><span style="font-size: 18pt; line-height: 115%;"><o:p></o:p></span></b></div>
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<div class="MsoNormal">
<span class="apple-converted-space"><span style="font-size: 13.5pt; line-height: 115%;">I entered this position on late Friday
afternoon to take advantage of elevated implied volatility (IV) levels due to
Apple’s earnings coming out Monday, January 27<sup>th</sup> after the close. I
initiated the trade with AAPL trading at ~$548.39. An iron condor consists of selling both an
out-of-the-money call and put spread simultaneously so there is only one
commission charge. It is considered a
4-leg option. I like taking advantage of high IV because you can obtain higher
premium prices that you sell for a credit.
In this case, I sold 4 contracts for a net credit of 85 cents. This translates into my money market account
receiving ~$340.00 less transaction costs.
This is the maximum profit I can make on the trade. I can “keep” all of this “up-front” credit if
Apple shares remain between $587.50 and $520.00 per share at expiration on
February 1<sup>st</sup>. Should Apple
shares exceed or decline by more than these levels, the maximum loss I would
face at expiration would be $660.00. Below “Return on Risk” box shows the
risk/return parameters of this trade.<o:p></o:p></span></span></div>
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<tbody>
<tr style="height: 15.0pt; mso-yfti-firstrow: yes; mso-yfti-irow: 0;">
<td colspan="2" style="border-right: solid black 1.0pt; border: solid windowtext 1.0pt; height: 15.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 217.0pt;" valign="bottom" width="289"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<b><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">IRON
CONDOR<o:p></o:p></span></b></div>
</td>
</tr>
<tr style="height: 14.25pt; mso-yfti-irow: 1;">
<td colspan="2" style="background: #00B050; border-bottom: none; border-left: solid windowtext 1.0pt; border-right: solid black 1.0pt; border-top: none; height: 14.25pt; mso-border-top-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 217.0pt;" valign="bottom" width="289"><div align="center" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: center;">
<b><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">AAPL
JAN5 587.5/590 C - 520/517.5 P<o:p></o:p></span></b></div>
</td>
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<td nowrap="" style="border-left: solid windowtext 1.0pt; border: none; height: 14.25pt; padding: 0in 5.4pt 0in 5.4pt; width: 176.55pt;" valign="bottom" width="235"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">PUT & CALL STRIKE MARGIN<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-right: solid windowtext 1.0pt; border: none; height: 14.25pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.45pt;" valign="bottom" width="54"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">$2.50<o:p></o:p></span></div>
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<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: solid windowtext 1.0pt; border-right: none; border-top: none; height: 14.25pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 176.55pt;" valign="bottom" width="235"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";"> (LESS) NET CREDIT<o:p></o:p></span></div>
</td>
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: none; border-right: solid windowtext 1.0pt; border-top: none; height: 14.25pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-right-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.45pt;" valign="bottom" width="54"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">$0.85
<o:p></o:p></span></div>
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<td nowrap="" style="border-left: solid windowtext 1.0pt; border: none; height: 14.25pt; padding: 0in 5.4pt 0in 5.4pt; width: 176.55pt;" valign="bottom" width="235"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">MAXIMUM RISK @ EXPIRATION =<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">$1.65<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">x # CONTRACTS<o:p></o:p></span></div>
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<td nowrap="" style="border-right: solid windowtext 1.0pt; border: none; height: 14.25pt; padding: 0in 5.4pt 0in 5.4pt; width: 40.45pt;" valign="bottom" width="54"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">4<o:p></o:p></span></div>
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<tr style="height: 15.75pt; mso-yfti-irow: 6;">
<td nowrap="" style="border-bottom: solid windowtext 1.0pt; border-left: solid windowtext 1.0pt; border-right: none; border-top: none; height: 15.75pt; mso-border-bottom-alt: solid windowtext .5pt; mso-border-left-alt: solid windowtext 1.0pt; padding: 0in 5.4pt 0in 5.4pt; width: 176.55pt;" valign="bottom" width="235"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">x # SHARES @<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">100<o:p></o:p></span></div>
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<td nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-left-color: windowtext; border-left-width: 1pt; border-style: none none none solid; height: 13.5pt; padding: 0in 5.4pt; width: 176.55pt;" valign="bottom" width="235"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="background-color: black; font-family: Arial, sans-serif; font-size: 10pt;"><span style="color: white;">MAX $ RISK =<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-right-color: windowtext; border-right-width: 1pt; border-style: none solid none none; height: 13.5pt; padding: 0in 5.4pt; width: 40.45pt;" valign="bottom" width="54"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><span style="background-color: black; font-family: Arial, sans-serif; font-size: 10pt;"><span style="color: white;">$660.00<o:p></o:p></span></span></b></div>
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<td nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-left-color: windowtext; border-left-width: 1pt; border-style: none none none solid; height: 12.75pt; padding: 0in 5.4pt; width: 176.55pt;" valign="bottom" width="235"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="background-color: black; font-family: Arial, sans-serif; font-size: 10pt;"><span style="color: white;">MAX % RETURN =<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-right-color: windowtext; border-right-width: 1pt; border-style: none solid none none; height: 12.75pt; padding: 0in 5.4pt; width: 40.45pt;" valign="bottom" width="54"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><span style="background-color: black; font-family: Arial, sans-serif; font-size: 10pt;"><span style="color: white;">51.5%<o:p></o:p></span></span></b></div>
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<td nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-bottom-color: windowtext; border-bottom-width: 1pt; border-left-color: windowtext; border-left-width: 1pt; border-style: none none solid solid; height: 16.5pt; padding: 0in 5.4pt; width: 176.55pt;" valign="bottom" width="235"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="background-color: black; font-family: Arial, sans-serif; font-size: 10pt;"><span style="color: white;">MAX $ RETURN =<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-bottom-color: windowtext; border-bottom-width: 1pt; border-right-color: windowtext; border-right-width: 1pt; border-style: none solid solid none; height: 16.5pt; padding: 0in 5.4pt; width: 40.45pt;" valign="bottom" width="54"><div align="right" class="MsoNormal" style="margin-bottom: 0.0001pt; text-align: right;">
<b><span style="background-color: black; font-family: Arial, sans-serif; font-size: 10pt;"><span style="color: white;">$340.00
<o:p></o:p></span></span></b></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;">Trade #2
& 3 Akamai Technologies (AKAM) Double Calendar Strategy<o:p></o:p></span></b></span></div>
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<a href="http://screencast.com/t/tg9gsWuxH5p">AKAM Trade#2</a></div>
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<a href="http://screencast.com/t/P1VCOYoWkWAR">AKAM Trade#3</a></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;"><br /></span></b></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;"><!--[if gte vml 1]><v:shape id="Picture_x0020_3" o:spid="_x0000_i1028"
type="#_x0000_t75" alt="http://charts.stocktwits.net/production/original_19198321.png?1390317123"
style='width:468pt;height:30pt;visibility:visible;mso-wrap-style:square'>
<v:imagedata src="file:///C:\Users\Harold\AppData\Local\Temp\msohtmlclip1\01\clip_image003.png"
o:title="original_19198321"/>
</v:shape><![endif]--><!--[if !vml]--><!--[endif]--></span></b></span><span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;"><o:p></o:p></span></b></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;"><!--[if gte vml 1]><v:shape id="Picture_x0020_4" o:spid="_x0000_i1027"
type="#_x0000_t75" alt="http://content.screencast.com/users/H2Options/folders/Jing/media/1cf61ef4-5752-488d-a56d-d6db0645256f/2014-01-21_1443.png"
style='width:468pt;height:28.5pt;visibility:visible;mso-wrap-style:square'>
<v:imagedata src="file:///C:\Users\Harold\AppData\Local\Temp\msohtmlclip1\01\clip_image005.png"
o:title="2014-01-21_1443"/>
</v:shape><![endif]--><!--[if !vml]--><!--[endif]--></span></b></span><span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;"><o:p></o:p></span></b></span></div>
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<span class="apple-converted-space"><span style="font-size: 13.5pt; line-height: 115%;">I entered these trades on 1/21/14 to take
advantage of expected moves in the stock due to earnings that will be announced
on Wednesday, February 5<sup>th</sup> after market close. AKAM was trading between ~$48.59 and $48.81
when I initiated the above trades. The
double calendar involves selling near term Feb1 calls and puts and buying the
longer-dated Feb same strike calls and puts.
In order to maximize profit AKAM will need to trade near the near term 55
call/42 put short strikes at expiration in 13 days. The maximum loss on the trade occurs is the
debit paid on the trades totaling ~$530.00… this would occur at ~$75 on the
upside; $35 on the downside. Maximum gains at the short strikes on calendars
are difficult to determine. The ability
to obtain at least some profit is quite wide as the breakeven points are $62.50
on the upside and $37.50 on the downside.
One important thing to consider is that implied volatility typically
rises into an earnings event causing option premiums to widen which should be
advantageous for the trade. It will be
interesting to see how this trade plays out. <o:p></o:p></span></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;">Trade #4
Celgene (CELG) 1-3-2 Put Butterfly
Strategy<o:p></o:p></span></b></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;"><a href="http://stks.co/b05zP">CELG Trade# 4</a></span></b></span></div>
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<span class="apple-converted-space"><b><br /></b></span></div>
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<span style="font-size: 13.5pt; line-height: 115%;">I opened this unbalanced trade on 1/13/14 with CELG
trading at ~$164.65 per share.</span><span style="font-size: 13.5pt; line-height: 115%;"> </span><span style="font-size: 13.5pt; line-height: 115%;">Celgene
as well as other large bio-tech stocks have been trading at rather high
levels.</span><span style="font-size: 13.5pt; line-height: 115%;"> </span><span style="font-size: 13.5pt; line-height: 115%;">The 1-3-2 put butterfly strategy
takes advantage of situations where you believe a stock is due for a pull-back,
albeit minimal.</span><span style="font-size: 13.5pt; line-height: 115%;"> </span><span style="font-size: 13.5pt; line-height: 115%;">So, you are in essence
neutral-to-bearish on the stock.</span><span style="font-size: 13.5pt; line-height: 115%;"> </span><span style="font-size: 13.5pt; line-height: 115%;">The
beauty of this strategy is there is no risk for the stock continuing its ascent
should it’s bullish ways continue.</span><span style="font-size: 13.5pt; line-height: 115%;"> </span><span style="font-size: 13.5pt; line-height: 115%;">I
entered the exact same trade (different expiration) back on 12/19/13, where
this actually happened: the stock was trading at $163.41 when I opened the
trade and on expiration on 1/10/14, Celgene was trading at $169.81… the result:
a $26.00 gain.</span><span style="font-size: 13.5pt; line-height: 115%;"> </span><span style="font-size: 13.5pt; line-height: 115%;">I only execute this type
of trade when you can receive a net credit.</span><span style="font-size: 13.5pt; line-height: 115%;">
</span><span style="font-size: 13.5pt; line-height: 115%;">The current trade shows that I received a 45 cent credit… so with 2
contracts, at minimum I will keep $90.00 if CELG trades at $160.00 or greater
at expiration in 13 days.</span><span style="font-size: 13.5pt; line-height: 115%;"> </span><span style="font-size: 13.5pt; line-height: 115%;">You begin to
see greater profit potential in the $155-$160 range. In fact, the maximum
profit is the middle short put strike at 155, where you have the potential to
receive $1,090 at expiration.</span><span style="font-size: 13.5pt; line-height: 115%;"> </span><span style="font-size: 13.5pt; line-height: 115%;">The
breakeven point on the downside is $152.30 and maximum loss of $910.00 occurs
at $150 or less.</span><span style="font-size: 13.5pt; line-height: 115%;"> </span><span style="font-size: 13.5pt; line-height: 115%;">Celgene took a pretty
good hit on 1/24 to $161.22, so it is getting real close to the maximum profit
range of $155-$160.</span><span style="font-size: 13.5pt; line-height: 115%;"> </span></div>
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<b><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; mso-fareast-font-family: "Times New Roman";">CELG
1-3-2 Put Butterfly<o:p></o:p></span></b></div>
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<td colspan="2" nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-left-color: windowtext; border-left-width: 1pt; border-style: none none none solid; height: 12.75pt; padding: 0in 5.4pt; width: 238.35pt;" valign="bottom" width="318"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="background-color: black; font-family: Arial, sans-serif; font-size: 10pt;"><span style="color: white;">$90 Gain @ $160 or greater<o:p></o:p></span></span></b></div>
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<td nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-left-color: windowtext; border-left-width: 1pt; border-style: none none none solid; height: 12.75pt; padding: 0in 5.4pt; width: 112.95pt;" valign="bottom" width="151"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="background-color: black; font-family: Arial, sans-serif; font-size: 10pt;"><span style="color: white;">Max Gain:<o:p></o:p></span></span></b></div>
</td>
<td colspan="2" nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-right-color: black; border-right-width: 1pt; border-style: none solid none none; height: 12.75pt; padding: 0in 5.4pt; width: 133.45pt;" valign="bottom" width="178"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="background-color: black; font-family: Arial, sans-serif; font-size: 10pt;"><span style="color: white;">~$1090 @ $155.00 per share<o:p></o:p></span></span></b></div>
</td>
</tr>
<tr style="height: 12.75pt; mso-yfti-irow: 3;">
<td nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-left-color: windowtext; border-left-width: 1pt; border-style: none none none solid; height: 12.75pt; padding: 0in 5.4pt; width: 112.95pt;" valign="bottom" width="151"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="background-color: black; font-family: Arial, sans-serif; font-size: 10pt;"><span style="color: white;">Max Loss:<o:p></o:p></span></span></b></div>
</td>
<td colspan="2" nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-right-color: black; border-right-width: 1pt; border-style: none solid none none; height: 12.75pt; padding: 0in 5.4pt; width: 133.45pt;" valign="bottom" width="178"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="background-color: black; font-family: Arial, sans-serif; font-size: 10pt;"><span style="color: white;">~$910 @ $150 or less<o:p></o:p></span></span></b></div>
</td>
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<td nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-bottom-color: windowtext; border-bottom-width: 1pt; border-left-color: windowtext; border-left-width: 1pt; border-style: none none solid solid; height: 13.5pt; padding: 0in 5.4pt; width: 112.95pt;" valign="bottom" width="151"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="background-color: black; font-family: Arial, sans-serif; font-size: 10pt;"><span style="color: white;">Break-even:<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-bottom-color: windowtext; border-bottom-width: 1pt; border-style: none none solid; height: 13.5pt; padding: 0in 5.4pt; width: 125.4pt;" valign="bottom" width="167"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
<b><span style="background-color: black; font-family: Arial, sans-serif; font-size: 10pt;"><span style="color: white;"> @ $152.30<o:p></o:p></span></span></b></div>
</td>
<td nowrap="" style="background-position: initial initial; background-repeat: initial initial; border-bottom-color: windowtext; border-bottom-width: 1pt; border-right-color: windowtext; border-right-width: 1pt; border-style: none solid solid none; height: 13.5pt; padding: 0in 5.4pt; width: 8.05pt;" valign="bottom" width="11"><div class="MsoNormal" style="margin-bottom: 0.0001pt;">
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;"><br /></span></b></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;">Trade #5 Dow
Chemical (DOW) Double Calendar Strategy<o:p></o:p></span></b></span></div>
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<a href="http://screencast.com/t/eKnCnqcSR">DOW Trade# 5</a></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;"><br /></span></b></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;"><!--[if gte vml 1]><v:shape id="Picture_x0020_6" o:spid="_x0000_i1025"
type="#_x0000_t75" alt="http://charts.stocktwits.net/production/original_18774361.png?1389192795"
style='width:468pt;height:29.25pt;visibility:visible;mso-wrap-style:square'>
<v:imagedata src="file:///C:\Users\Harold\AppData\Local\Temp\msohtmlclip1\01\clip_image009.png"
o:title="original_18774361"/>
</v:shape><![endif]--><!--[if !vml]--><!--[endif]--></span></b></span><span class="apple-converted-space"><b><span style="font-size: 13.5pt; line-height: 115%;"><o:p></o:p></span></b></span></div>
<br />
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<span class="apple-converted-space"><span style="font-size: 13.5pt; line-height: 115%;">The same idea as with AKAM, is employed
here with Dow Chemical. It reports
earnings</span></span></div>
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<span class="apple-converted-space"><span style="font-size: 13.5pt; line-height: 115%;">before the market opens on January 29<sup>th</sup>. Maximum profit occurs at the February near-term short strikes 47 calls and 39 puts. Currently, DOW is trading right in the middle at $43.41 per share. So, any movement towards either strike between now and February expiration 27 days from now could result in a decent profit. Losses are again limited to the amount paid for the trade which is ~$400.00.<o:p></o:p></span></span></div>
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<span class="apple-converted-space"><span style="font-size: 13.5pt; line-height: 115%;"><br /></span></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt;"><br /></span></b></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt;">Trade #6 Ebay (EBAY) Double Calendar
Strategy<o:p></o:p></span></b></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt;">Trade # 10 Sherwin Williams (SHW) Double
Diagonal Calendar Strategy<o:p></o:p></span></b></span></div>
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<span class="apple-converted-space"><b><span style="font-size: 13.5pt;">Trade # 13 Yahoo! (YHOO) Double Calendar
Strategy<o:p></o:p></span></b></span></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 13.5pt;">I thought I would go
ahead and lump trades 6, 10, and 13 together since they all are the same types
of strategies as discussed AKAM and DOW.
Without question, the double calendar in earnings season is one of my favorite options strategies. I'll try to explain... With the heightened volatility
in the general market environment, coupled with a company earnings report, this generally bodes
well for calendar trades. Volatility (i.e., significant uncertainty/fear) is expected to expand into a company’s earnings report. This should in turn expand my calendar position value to the point that I can possibly close or adjust the positions <b><i>ahead</i></b>
of the company report. However, in the case of trade #6 Ebay, they just reported on Wednesday 1/22... I've decided to hold the position because volatility has remained high. Why? I believe there are two primary factors: 1) the macro environment is more uncertain; 2) some lingering stock specific news from Carl Icahn demanding Ebay to spin off their PayPal unit. I'm hoping for some pop/drop in the shares soon, otherwise any sign of a volatility crush, I will close out the position immediately. Under normal conditions volatility in the option pricing should fall quickly after company earnings and this too can potentially expand closing prices because of the effect of time decay (theta). Theta also works in my favor as the short options lose value
faster than the longer dated calls and puts. <o:p></o:p></span></div>
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<span style="font-family: 'Times New Roman', serif; font-size: 13.5pt;">I also want to emphasize the
probability of profit on calendars are pretty darn good. Again calendars take advantage of the
underlying trading at or near the strike in the trade and there is also a wide range
for the stock to trade which gives a better probability of success especially
if there is a significant move in the price of the shares. Keep in mind that each individual calendar
can potentially <b><i>more than double</i></b> in value so there is a very good risk/reward
situation for a trader. The logic with calendars is to have the shares to be
near either short strike in order for the calendar to expand and any rise in
volatility will also increase the value of the options. Below are the double calendar set-ups and current P&Ls:<o:p></o:p></span></div>
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<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 936px;">
<colgroup><col style="mso-width-alt: 4205; mso-width-source: userset; width: 86pt;" width="115"></col>
<col style="mso-width-alt: 1316; mso-width-source: userset; width: 27pt;" width="36"></col>
<col style="mso-width-alt: 731; mso-width-source: userset; width: 15pt;" width="20"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 1499; mso-width-source: userset; width: 31pt;" width="41"></col>
<col style="mso-width-alt: 1133; mso-width-source: userset; width: 23pt;" width="31"></col>
<col style="mso-width-alt: 2450; mso-width-source: userset; width: 50pt;" width="67"></col>
<col style="mso-width-alt: 2377; mso-width-source: userset; width: 49pt;" width="65"></col>
<col style="mso-width-alt: 1645; mso-width-source: userset; width: 34pt;" width="45"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 1938; mso-width-source: userset; width: 40pt;" width="53"></col>
<col style="mso-width-alt: 2779; mso-width-source: userset; width: 57pt;" width="76"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 1536; mso-width-source: userset; width: 32pt;" width="42"></col>
<col style="mso-width-alt: 2230; mso-width-source: userset; width: 46pt;" width="61"></col>
<col style="mso-width-alt: 3364; mso-width-source: userset; width: 69pt;" width="92"></col>
</colgroup><tbody>
<tr height="34" style="height: 25.5pt;">
<td class="xl135" height="34" style="height: 25.5pt; width: 86pt;" width="115">*EBAY @~
$54.74</td>
<td class="xl132" colspan="5" style="width: 144pt;" width="192">EBAY DOUBLE
CALENDAR </td>
<td class="xl108" style="width: 50pt;" width="67">Open</td>
<td class="xl109" style="width: 49pt;" width="65">Dollar Value</td>
<td class="xl109" style="width: 34pt;" width="45">Open Delta</td>
<td class="xl140" style="width: 48pt;" width="64">01/24/14</td>
<td class="xl109" style="width: 40pt;" width="53">Open IV</td>
<td class="xl110" style="width: 57pt;" width="76"> Net P&L</td>
<td class="xl146" colspan="2" style="width: 80pt;" width="106">EBAY Current Price:</td>
<td align="right" class="xl142" style="width: 46pt;" width="61">$54.30</td>
<td style="width: 69pt;" width="92"></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl111" height="19" style="height: 14.25pt;">12/31/13</td>
<td class="xl110">Buy</td>
<td align="right" class="xl110">5</td>
<td class="xl128"> Mar</td>
<td align="right" class="xl110">57.5</td>
<td class="xl110">Call</td>
<td align="right" class="xl112">$1.68</td>
<td align="right" class="xl115">-$840.00 </td>
<td class="xl106"> 24</td>
<td align="right" class="xl130">$1.040 </td>
<td class="xl129"> 24.95%</td>
<td align="right" class="xl115">-$320.00</td>
<td class="xl141" colspan="2"> Current IV:</td>
<td align="right" class="xl143">27.45%</td>
<td></td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td class="xl111" height="20" style="height: 15.0pt;">12/31/13</td>
<td class="xl110">Buy</td>
<td align="right" class="xl110">5</td>
<td class="xl128"> Mar</td>
<td align="right" class="xl110">50</td>
<td class="xl110">Put</td>
<td align="right" class="xl112">$1.04</td>
<td align="right" class="xl115">-$520.00</td>
<td class="xl106"> -27</td>
<td align="right" class="xl130">$0.605</td>
<td class="xl129"> 28.03%</td>
<td align="right" class="xl115">-$217.50</td>
<td class="xl144" colspan="4"> 1 σ move +/- to FEB
expiry: $58.51/ $50.26</td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl106" height="19" style="height: 14.25pt;"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl112"></td>
<td class="xl112"></td>
<td></td>
<td class="xl127"></td>
<td class="xl113"></td>
<td class="xl112"></td>
<td class="xl107"></td>
<td></td>
<td class="xl116"></td>
<td class="xl117"></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl122" height="19" style="height: 14.25pt;">12/31/13</td>
<td class="xl123">Sell</td>
<td align="right" class="xl123">-5</td>
<td class="xl123"> Feb</td>
<td align="right" class="xl123">57.5</td>
<td class="xl123">Call</td>
<td align="right" class="xl124">$1.29</td>
<td align="right" class="xl124">$645.00</td>
<td class="xl125"> 20</td>
<td align="right" class="xl138">$0.500</td>
<td class="xl139"> 27.41%</td>
<td align="right" class="xl124">$395.00</td>
<td class="xl107"></td>
<td></td>
<td class="xl116"></td>
<td class="xl117"></td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td class="xl122" height="20" style="height: 15.0pt;">12/31/13</td>
<td class="xl123">Sell</td>
<td align="right" class="xl123">-5</td>
<td class="xl123"> Feb</td>
<td align="right" class="xl123">50</td>
<td class="xl123">Put</td>
<td align="right" class="xl124">$0.73</td>
<td align="right" class="xl124">$365.00</td>
<td class="xl125"> -25</td>
<td align="right" class="xl138">$0.235</td>
<td class="xl139"> 30.93%</td>
<td align="right" class="xl124">$247.50</td>
<td class="xl107"></td>
<td></td>
<td class="xl116"></td>
<td class="xl117"></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl135" colspan="3" height="21" style="height: 15.75pt; mso-ignore: colspan;">*Underlying
Open Share Price</td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl131">Max Loss</td>
<td align="right" class="xl136">-$350.00</td>
<td class="xl112"></td>
<td class="xl113"></td>
<td class="xl113"></td>
<td class="xl120"></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl135" colspan="2" height="21" style="height: 15.75pt; mso-ignore: colspan;">*Opening
IV@ 29.74%</td>
<td class="xl135"></td>
<td class="xl110"></td>
<td class="xl133" colspan="3"></td>
<td class="xl112"></td>
<td class="xl112"> </td>
<td class="xl119"> O P&L=</td>
<td class="xl121"></td>
<td align="right" class="xl126">$105.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl110" height="17" style="height: 12.75pt;"></td>
<td class="xl134" colspan="6">TOTAL EBAY P&L
=</td>
<td align="right" class="xl137">$105.00</td>
<td class="xl112"></td>
<td class="xl114"></td>
<td class="xl113"></td>
<td class="xl112"></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl106" height="21" style="height: 15.75pt;"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td class="xl118" colspan="5">FOR ILLUSTRATION
PURPOSES ONLY!!!</td>
<td><br /></td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody></table>
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<table border="0" cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 1146px;">
<colgroup><col style="mso-width-alt: 4205; mso-width-source: userset; width: 86pt;" width="115"></col>
<col span="6" style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 2742; mso-width-source: userset; width: 56pt;" width="75"></col>
<col style="mso-width-alt: 2596; mso-width-source: userset; width: 53pt;" width="71"></col>
<col span="2" style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 2779; mso-width-source: userset; width: 57pt;" width="76"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 3035; mso-width-source: userset; width: 62pt;" width="83"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 3145; mso-width-source: userset; width: 65pt;" width="86"></col>
</colgroup><tbody>
<tr height="20" style="height: 15.0pt;">
<td class="xl117" height="20" style="height: 15.0pt; width: 86pt;" width="115"><br />
<br />
*SHW @~
$183.15</td>
<td class="xl141" colspan="5" style="width: 240pt;" width="320">SHW DOUBLE DIAGONAL /
CALENDAR </td>
<td class="xl109" style="width: 48pt;" width="64">Open</td>
<td class="xl111" style="width: 56pt;" width="75">Dollar Value</td>
<td class="xl108" style="width: 53pt;" width="71">Open Delta</td>
<td class="xl128" style="width: 48pt;" width="64">01/21/14</td>
<td class="xl110" style="width: 48pt;" width="64">Open IV </td>
<td class="xl110" style="width: 57pt;" width="76">Net P&L</td>
<td class="xl123" colspan="2" style="mso-ignore: colspan; width: 110pt;" width="147"> SHW
Current Price:</td>
<td align="right" class="xl122" style="width: 48pt;" width="64">$190.80</td>
<td style="width: 65pt;" width="86"></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl112" height="19" style="height: 14.25pt;">01/03/14</td>
<td class="xl110">Buy</td>
<td align="right" class="xl110">2</td>
<td class="xl138"> Mar</td>
<td align="right" class="xl110">200</td>
<td class="xl110"> Call</td>
<td align="right" class="xl113"> $2.25 </td>
<td align="right" class="xl118">-$450.00 </td>
<td class="xl107">22</td>
<td align="right" class="xl137"> $3.25</td>
<td class="xl139"> 22. 92%</td>
<td align="right" class="xl118">$200.00</td>
<td class="xl106" colspan="2"> Current IV:</td>
<td align="right" class="xl124">28.34%</td>
<td></td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td class="xl112" height="20" style="height: 15.0pt;">01/03/14</td>
<td class="xl110">Buy</td>
<td align="right" class="xl110">2</td>
<td class="xl138"> Mar</td>
<td align="right" class="xl110">155</td>
<td class="xl110"> Put</td>
<td align="right" class="xl113">$1.53</td>
<td align="right" class="xl118">-$306.00</td>
<td class="xl107"> -11</td>
<td align="right" class="xl140">$0.600</td>
<td class="xl139">31. 37%</td>
<td align="right" class="xl118">-$186.00</td>
<td class="xl130" colspan="4"> 1 σ move +/- to FEB
expiry: $205.61/ $175.75</td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl107" height="19" style="height: 14.25pt;"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl113"></td>
<td class="xl113"></td>
<td></td>
<td class="xl137"></td>
<td class="xl114"></td>
<td class="xl113"></td>
<td class="xl108"></td>
<td></td>
<td class="xl125"></td>
<td class="xl126"></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl119" height="19" style="height: 14.25pt;">01/03/14</td>
<td class="xl120">Sell</td>
<td align="right" class="xl120">-2</td>
<td class="xl120"> Feb</td>
<td align="right" class="xl120">200</td>
<td class="xl120"> Call</td>
<td align="right" class="xl121">$1.35</td>
<td align="right" class="xl121">$270.00</td>
<td class="xl107"> 17</td>
<td align="right" class="xl137">$1.98</td>
<td class="xl139">23. 50%</td>
<td align="right" class="xl121">-$125.00</td>
<td class="xl108"></td>
<td></td>
<td class="xl125"></td>
<td class="xl126"></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl119" height="19" style="height: 14.25pt;">01/03/14</td>
<td class="xl120">Sell</td>
<td align="right" class="xl120">-2</td>
<td class="xl120"> Feb</td>
<td align="right" class="xl120">160</td>
<td class="xl120"> Put</td>
<td align="right" class="xl121">$1.20</td>
<td align="right" class="xl121">$240.00</td>
<td class="xl107"> -11</td>
<td align="right" class="xl140">$0.300</td>
<td class="xl139">31. 18%</td>
<td align="right" class="xl121">$180.00</td>
<td class="xl108"></td>
<td></td>
<td class="xl125"></td>
<td class="xl126"></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl117" colspan="3" height="21" style="height: 15.75pt; mso-ignore: colspan;">*Underlying
Open Share Price</td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl113"></td>
<td class="xl115"></td>
<td class="xl113"></td>
<td class="xl114"></td>
<td class="xl114"></td>
<td class="xl134"></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl117" colspan="2" height="21" style="height: 15.75pt; mso-ignore: colspan;">*Opening
IV@ 26.04%</td>
<td></td>
<td class="xl110"></td>
<td class="xl111" colspan="3"></td>
<td class="xl113"></td>
<td class="xl113"></td>
<td class="xl132"> O P&L=</td>
<td class="xl135"></td>
<td align="right" class="xl136">$69.00</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="17" style="height: 12.75pt;">
<td class="xl110" height="17" style="height: 12.75pt;"> </td>
<td class="xl142" colspan="6"> TOTAL SHW P&L
=</td>
<td align="right" class="xl133">$69.00</td>
<td class="xl113"></td>
<td class="xl116"></td>
<td class="xl114"></td>
<td class="xl113"></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl107" height="21" style="height: 15.75pt;"></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td></td>
<td class="xl127" colspan="5">FOR ILLUSTRATION
PURPOSES ONLY!!!</td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
</tbody></table>
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<colgroup><col style="mso-width-alt: 4205; mso-width-source: userset; width: 86pt;" width="115"></col>
<col span="6" style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 2742; mso-width-source: userset; width: 56pt;" width="75"></col>
<col style="mso-width-alt: 2596; mso-width-source: userset; width: 53pt;" width="71"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 2377; mso-width-source: userset; width: 49pt;" width="65"></col>
<col style="mso-width-alt: 2779; mso-width-source: userset; width: 57pt;" width="76"></col>
<col style="width: 48pt;" width="64"></col>
<col style="mso-width-alt: 3035; mso-width-source: userset; width: 62pt;" width="83"></col>
<col style="mso-width-alt: 2596; mso-width-source: userset; width: 53pt;" width="71"></col>
<col style="mso-width-alt: 3145; mso-width-source: userset; width: 65pt;" width="86"></col>
</colgroup><tbody>
<tr height="20" style="height: 15.0pt;">
<td class="xl116" height="20" style="height: 15.0pt; width: 86pt;" width="115">*YHOO @~
$41.55</td>
<td class="xl143" colspan="5" style="width: 240pt;" width="320">YHOO DOUBLE
CALENDAR </td>
<td class="xl109" style="width: 48pt;" width="64">Open</td>
<td class="xl111" style="width: 56pt;" width="75">Dollar Value</td>
<td class="xl108" style="width: 53pt;" width="71">Open Delta</td>
<td class="xl127" style="width: 48pt;" width="64">01/21/14</td>
<td class="xl110" style="width: 49pt;" width="65">Open IV</td>
<td class="xl110" style="width: 57pt;" width="76">Net P&L</td>
<td class="xl122" colspan="2" style="mso-ignore: colspan; width: 110pt;" width="147"> YHOO
Current Price:</td>
<td align="right" class="xl121" style="width: 53pt;" width="71">$37.91</td>
<td style="width: 65pt;" width="86"></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl112" height="19" style="height: 14.25pt;">01/08/14</td>
<td class="xl110">Buy</td>
<td align="right" class="xl110">7</td>
<td class="xl137"> Mar</td>
<td align="right" class="xl110">47</td>
<td class="xl110"> Call</td>
<td align="right" class="xl113">$0.84</td>
<td align="right" class="xl117">-$588.00</td>
<td class="xl142"> 24</td>
<td align="right" class="xl139">$0.325</td>
<td class="xl138"> 34.45%</td>
<td align="right" class="xl117">-$360.50</td>
<td class="xl106" colspan="2"> Current IV:</td>
<td align="right" class="xl123">41.36%</td>
<td></td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td class="xl112" height="20" style="height: 15.0pt;">01/08/14</td>
<td class="xl110">Buy</td>
<td align="right" class="xl110">7</td>
<td class="xl137"> Mar</td>
<td align="right" class="xl110">37</td>
<td class="xl110"> Put</td>
<td align="right" class="xl113">$0.79</td>
<td align="right" class="xl117">-$553.00</td>
<td class="xl140"> -20</td>
<td align="right" class="xl139">$1.915</td>
<td class="xl138"> 34.55%</td>
<td align="right" class="xl117">$787.50</td>
<td class="xl129" colspan="4"> 1 σ move +/- to FEB
expiry: $42.24/ $33.59</td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl107" height="19" style="height: 14.25pt;"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl113"></td>
<td class="xl113"></td>
<td class="xl140"></td>
<td class="xl136"></td>
<td class="xl114"></td>
<td class="xl113"></td>
<td class="xl108"></td>
<td></td>
<td class="xl124"></td>
<td class="xl125"></td>
</tr>
<tr height="19" style="height: 14.25pt;">
<td class="xl118" height="19" style="height: 14.25pt;">01/08/14</td>
<td class="xl119">Sell</td>
<td align="right" class="xl119">-7</td>
<td class="xl119"> Feb</td>
<td align="right" class="xl119">47</td>
<td class="xl119"> Call</td>
<td align="right" class="xl120">$0.47</td>
<td align="right" class="xl120">$329.00</td>
<td class="xl140"> 18</td>
<td align="right" class="xl139">$0.085</td>
<td class="xl138"> 35.61%</td>
<td align="right" class="xl120">$269.50</td>
<td class="xl108"></td>
<td></td>
<td class="xl124"></td>
<td class="xl125"></td>
</tr>
<tr height="20" style="height: 15.0pt;">
<td class="xl118" height="20" style="height: 15.0pt;">01/08/14</td>
<td class="xl119">Sell</td>
<td align="right" class="xl119">-7</td>
<td class="xl119"> Feb</td>
<td align="right" class="xl119"> 37 </td>
<td class="xl119">Put</td>
<td align="right" class="xl120">$0.41</td>
<td align="right" class="xl120">$287.00</td>
<td class="xl140"> -15</td>
<td align="right" class="xl139">$1.245</td>
<td class="xl138"> 34.16%</td>
<td align="right" class="xl120">-$584.50</td>
<td class="xl108"></td>
<td></td>
<td class="xl124"></td>
<td class="xl125"></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl116" colspan="3" height="21" style="height: 15.75pt; mso-ignore: colspan;">*Underlying
Open Share Price</td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl110"></td>
<td class="xl113"></td>
<td class="xl115"></td>
<td class="xl141">7</td>
<td class="xl114"></td>
<td class="xl114"></td>
<td class="xl133"></td>
<td></td>
<td></td>
<td></td>
<td></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl116" colspan="2" height="21" style="height: 15.75pt; mso-ignore: colspan;">*Opening
IV@ 33.54%</td>
<td></td>
<td class="xl110"></td>
<td class="xl111" colspan="3"></td>
<td class="xl113"></td>
<td class="xl113"></td>
<td class="xl131">O P&L=</td>
<td class="xl134"></td>
<td align="right" class="xl135">$112.00</td>
<td><br /></td>
<td><br /></td>
<td></td>
<td></td>
</tr>
<tr height="21" style="height: 15.75pt;">
<td class="xl110" height="21" style="height: 15.75pt;"><br />
<br />
<br />
<br />
Happy Trading!<br />
H2Options<br />
<br />
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</td><td class="xl144" colspan="6"><br /></td><td align="right" class="xl132"><br /></td><td class="xl126" colspan="5"><br /></td><td><br /></td><td><br /></td><td><br /></td></tr>
</tbody></table>
H2Optionshttp://www.blogger.com/profile/17866211551152350212noreply@blogger.com1tag:blogger.com,1999:blog-933973642078676685.post-9619300892633097572011-10-24T06:30:00.000-07:002011-10-24T06:30:32.176-07:00An Easy Option Strategy to Consider: Time Spreads<span class="Apple-style-span" style="background-color: white; color: #666666; font-family: Arial, Helvetica, sans-serif; font-size: 12px; line-height: 20px;"></span><br />
<div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">Today, I'd like to share one of the easiest yet most profitable strategies an option trader can make. The option strategy is called a <strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">time spread or calendar spread</strong>. <em style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"> If you employ this strategy successfully, I only ask that you give a healthy portion of your profits to a charity or individual in need!</strong></em></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">There are 4 reasons I believe this type of option strategy is worthwhile</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">1) The trade is easy to construct</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">2) The trade is easy to manage</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">3) The trade does not need to be adjusted once opened because it is "forgiving" </div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">4) The trade is an excellent foundation for more advanced strategies (diagonals/double)</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">With the above reasons in mind, the first requirement in learning time spreads is knowing how to construct them. The basic time spread is defined in 2 ways:</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">1) Sell a near month call and Buy a far month call having the same strike or exercise price.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"> For instance, you can Sell a November 50 call to open and</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"> Buy a December 50 call to open the trade</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">This is called a <strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">call time spread</strong>. (bullish bias: believe stock will rise)</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">2) Sell a near month put and Buy a far month put having the same strike price.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"> For instance, you can Sell a November 50 put to open and</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"> Buy a December 50 put to open the trade</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">This is called a <strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">put time spread</strong>. (bearish bias: believe stock will decline)</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">Either time spread is opened as a single trade.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: underline;">Making the Trade</span></strong>:</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">Questions you ask yourself:</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">1) What underlying stock do I choose for my option time spread?</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">2) Once I've chosen a stock, am I bullish, bearish, or neutral on its price direction?</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">3) Once I've determined the direction, I then ask what option months and strike price do I choose?</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">4) What is my maximum risk/reward in placing the trade?</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">To answer these questions, let's look at an example.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: underline;">Answer #1</span>: An underlying stock that I've chosen is Lockheed Martin Corporation (LMT). Currently, Lockheed's stock price is trading at $77.40 per share. Lockheed, as well as most of the stock market has seen a recent rally. However, I am of the belief that Lockheed has limited upside over the next couple of months, and do not anticipate a collapse anytime soon either. <span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: underline;">Answer #2</span>: So, my stance is more neutral than anything. Given my neutral bias, I will place a <span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: underline;">put time spread</span> trade.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: underline;">Answer #3</span>: Now I need to determine Lockheed's put option months and strike price. October put options have already expired, so I will use the November (near month put contract with 27 days till expiration) and December (far month put contract with 55 days till expiration). In choosing what put strikes to use, as a rule of thumb, always opt for the out-of-the-money (OTM) strikes because in-the-money (ITM) strikes exhibit larger bid ask spreads plus they run a higher risk of early assignment. In Lockheed's case, the best OTM put strike is 75. The 75 strike price is currently $2.40 OTM ($77.40-75). See the LMT option chain. <a href="http://screencast.com/t/Pshn20BcTK0J" style="-webkit-transition-delay: initial; -webkit-transition-duration: 0.3s; -webkit-transition-property: color; -webkit-transition-timing-function: ease-out; background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #6089a5; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: none; outline-width: initial; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: none;">http://screencast.com/t/Pshn20BcTK0J</a></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">With these three questions answered, we can now construct the specific put time spread trade in Lockheed Martin and then answer question 4: <a href="http://screencast.com/t/5JsZqfIr2H" style="-webkit-transition-delay: initial; -webkit-transition-duration: 0.3s; -webkit-transition-property: color; -webkit-transition-timing-function: ease-out; background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #6089a5; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: none; outline-width: initial; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: none;">http://screencast.com/t/5JsZqfIr2H</a></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">Note that we are trading 5 contracts that results in a net debit of $0.98 per contract. Time spread options always results in a net debit or payment. $0.98 is the midpoint price difference between the December 75 option buy (ask -paid) premium price and November 75 option sell (bid -received). So the initial total cash outlay is approximately $500.00 including trading costs. <span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: underline;">Answer #4</span>: The maximum gain you can obtain is approximately $678.00 if LMT trades at exactly $75 at the end of November expiration. Obviously, the probability of that happening to the penny is not likely. However, if you look at the profitability link, you can see that you will make money on the trade as long as LMT trades between a break even low of $71.28 and break even high of $78.58. You begin to lose money on the trade if it breaks below or above those levels. Should LMT explode up or plunge down, you can always exit your trade before incurring the maximum loss. Keep in mind that the maximum loss of ~$480 doesn't occur until the stock price goes to $20 or as high as $90.00. See profitability analysis: <a href="http://screencast.com/t/CITT8XHNG7q3" style="-webkit-transition-delay: initial; -webkit-transition-duration: 0.3s; -webkit-transition-property: color; -webkit-transition-timing-function: ease-out; background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #6089a5; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: none; outline-width: initial; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: none;">http://screencast.com/t/CITT8XHNG7q3</a></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">Let me know if you have any questions. Blessings to all!</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><em style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">Follow me on Twitter @ H2Options</em></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><em style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">The above example was for illustrative purposes only. Option trading involves risk and you can lose money!</em></strong></div>H2Optionshttp://www.blogger.com/profile/17866211551152350212noreply@blogger.com0tag:blogger.com,1999:blog-933973642078676685.post-55395507468626807662011-09-09T20:46:00.000-07:002011-09-09T20:53:58.497-07:00<span class="Apple-style-span" style="color: #6089a5; font-family: Georgia, serif;"><span class="Apple-style-span" style="font-weight: 800; line-height: 17px;"><b><span style="color: #6089a5; font-family: Georgia, serif; font-size: 18pt; line-height: 115%;"><span style="color: #6089a5; text-decoration: none;">Smithfield Foods (SFD) Target Pric</span>e & Profit / Loss Scenarios</span></b></span></span><span class="Apple-style-span" style="background-color: white; color: #666666; font-family: arial; font-size: 24px; font-weight: bold; line-height: 17px;"><b><span style="color: #6089a5; font-family: Georgia, serif; font-size: 12pt;"><br />
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<span class="Apple-style-span" style="color: #6089a5; font-family: Georgia, serif;"><span class="Apple-style-span" style="font-weight: 800; line-height: 17px;"></span></span><br />
<div class="MsoNormal" style="line-height: 13.2pt; margin-bottom: .0001pt; margin-bottom: 0in; mso-outline-level: 2;"><span class="Apple-style-span" style="color: #6089a5; font-family: Georgia, serif;"></span><br />
<div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><span class="Apple-style-span" style="color: #6089a5; font-family: Georgia, serif;"><b><span style="color: #6089a5; font-family: "Georgia","serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">This is a follow-up to my previous post. I failed to mention a possible target price on my Smithfield Foods option trade. Based on the chart below, it hits resistance at $23.13. Thus, the target exit price would preferably be around $23. However, remember this is an option trade, which has implications that are different from buying and selling stocks. For instance, assume that I keep the option position up to the January 21, 2012 expiration, and SFD is trading only $22.50 or higher. I will still receive the maximum profit on the position of $411! </span></b><span style="color: black; font-family: "Times New Roman","serif"; font-size: 13.5pt; mso-fareast-font-family: "Times New Roman";"><o:p></o:p></span></span></div><span class="Apple-style-span" style="color: #6089a5; font-family: Georgia, serif;"> <div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><br />
</div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><br />
</div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><b><span style="color: #6089a5; font-family: "Georgia","serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Like I said, option pricing differs considerably from its underlying stock price. For instance, stock price is a perpetual price (in theory anyways unless it is an Enron!), where an option's price has a limited life and is considered a "wasting asset". Other differences that impact an option's price are "the greeks": delta, theta, gamma, and vega.<o:p></o:p></span></b></div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><br />
</div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><b><span style="color: #6089a5; font-family: "Georgia","serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">The 4 Primary Option Greeks are:<br />
<br />
<a href="http://www.optiontradingpedia.com/free_option_greeks.htm#What Is Option Delta?"><span style="color: #6089a5; text-decoration: none; text-underline: none;">Delta (Greek Symbol δ) - a measure of an option's sensitivity to changes in the price of the underlying asset </span></a><br />
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<a href="http://www.optiontradingpedia.com/free_option_greeks.htm#What Is Option Gamma?"><span style="color: #6089a5; text-decoration: none; text-underline: none;">Gamma (Greek Symbol γ) - a measure of delta's sensitivity to changes in the price of the underlying asset </span></a><br />
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<a href="http://www.optiontradingpedia.com/free_option_greeks.htm#What Is Option Vega?"><span style="color: #6089a5; text-decoration: none; text-underline: none;">Vega - a measure of an option's sensitivity to changes in the volatility of the underlying asset </span></a><br />
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<a href="http://www.optiontradingpedia.com/free_option_greeks.htm#What Is Option Theta?"><span style="color: #6089a5; text-decoration: none; text-underline: none;">Theta (Greek Symbol θ) - a measure of an option's sensitivity to time decay </span></a><br />
<o:p></o:p></span></b></div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><b><span style="color: #6089a5; font-family: "Georgia","serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">At this point, I don't want to get into the details of the greeks. I strongly suggest reading Lawrence G. McMillan's book titled "Options as a Strategic Investment" <a href="http://www.amazon.com/Options-Strategic-Investment-Lawrence-McMillan/dp/0735201978"><span style="color: #6089a5; text-decoration: none; text-underline: none;">http://www.amazon.com/Options-Strategic-Investment-Lawrence-McMillan/dp/0735201978</span></a> for a solid foundation in understanding option pricing and advanced option strategies. <o:p></o:p></span></b></div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><br />
</div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><b><span style="color: #6089a5; font-family: "Georgia","serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">For now, just understand that option greeks and time impact an option's price. This impact is even more pronounced for companies that have volatile stock prices. The more volatile the underlying stock price is, the more expensive, or valuable an option's price will be simply because of its volatility. A volatile company example would be Riverbed Technology (RVBD) which has seen its stock price fluctuate in the last year from $17 to $45, back down to $20, versus a relatively stable Procter & Gamble (PG) that has remained in a stock price range between $57-$67. So where does SFD stand in terms of its volatility? It's volatility is "in the middle" of these examples. <o:p></o:p></span></b></div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><br />
</div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><b><span style="color: #6089a5; font-family: "Georgia","serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Given that the SFD option position does not expire for another 497 days (January 21, 2012), you might ask "what would my profit be if SFD explodes to $23 by September 30?" Thanks to the amazing technology of today's trading platforms, you can obtain a fairly accurate estimate of profit. I use the thinkorswim (TOS) platform for my trading purposes. <o:p></o:p></span></b></div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><br />
</div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><b><span style="color: #6089a5; font-family: "Georgia","serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">Going to the TOS platform's "Analyze" tab you can easily obtain theoretical option pricing by changing the underlying stock price and date. Doing this for SFD results in an estimated profit of $128 if you decide to close out of the position on September 30. Assume you decide to close out of the trade, you would have realized 31% of the total profit potential ($128/$411). Of course, you could decide to hold on to the position, but you also risk the price moving against you and your profit could be lost. <o:p></o:p></span></b></div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><br />
</div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><b><span style="color: #6089a5; font-family: "Georgia","serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">On the flip side, what if SFD's stock price moves against you, say to $18.00 by September 30? Again, you can enter the criteria in the TOS platform for an estimate. A move lower to $18 by September 30 results in an estimated loss of $141, or 42% of total possible loss ($141/$339). Once again, a decision has to be made. Do I think SFD is going to recover in time (by January)? After all, the most you can lose on the trade is $339. One of the main reasons I placed this trade further out in time was to allow for some downside risk, so for me, I would probably hold out for a longer period of time. Doing so does risk the underlying price for further declines that may be unrecoverable. But I am willing to take that risk. <o:p></o:p></span></b></div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><br />
</div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><b><span style="color: #6089a5; font-family: "Georgia","serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">In conclusion, an easy, straightforward way for me to understand my vertical bull call debit spread positions are as follows: <o:p></o:p></span></b></div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><br />
</div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><b><span style="color: #6089a5; font-family: "Georgia","serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">MAXIMUM RISK (LOSS) CAN OCCUR IF THE UNDERLYING STOCK PRICE FALLS BELOW THE LOWER CALL STRIKE PRICE<o:p></o:p></span></b></div><div class="MsoNormal" style="font-weight: bold; line-height: 13.2pt; margin-bottom: 0.0001pt;"><b><span style="color: #6089a5; font-family: "Georgia","serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> --- In our SFD trade the lower strike price is JANUARY $20 (current (9/9/11) SFD Stock Price is: $19.45 <o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 13.2pt; margin-bottom: 0.0001pt;"><span class="Apple-style-span" style="font-weight: 800;"><br />
</span></div><div class="MsoNormal" style="line-height: 13.2pt; margin-bottom: 0.0001pt;"><span class="Apple-style-span" style="font-weight: 800;"></span></div><div class="MsoNormal" style="line-height: 13.2pt; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: #6089a5; font-family: "Georgia","serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";">MAXIMUM GAIN CAN OCCUR IF THE UNDERLYING STOCK PRICE IS ABOVE THE HIGHER CALL STRIKE PRICE<o:p></o:p></span></b></div><div class="MsoNormal" style="line-height: 13.2pt; margin-bottom: .0001pt; margin-bottom: 0in;"><b><span style="color: #6089a5; font-family: "Georgia","serif"; font-size: 12.0pt; mso-bidi-font-family: "Times New Roman"; mso-fareast-font-family: "Times New Roman";"> --- In our SFD trade the higher strike price is JANUARY $22.50 (current (9/9/11) SFD Stock Price is: $19.45 <o:p></o:p></span></b></div><br />
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</div></span><span class="Apple-style-span" style="font-size: 12px; line-height: normal;"><img alt="" class="" height="auto" smartload="8" src="http://www.randomactsofkindness.org/images/SFD%20Target%20Price%2023%2009-08-11.png" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-style: none; border-bottom-width: 0px; border-color: initial; border-color: initial; border-left-style: none; border-left-width: 0px; border-right-style: none; border-right-width: 0px; border-style: initial; border-top-style: none; border-top-width: 0px; border-width: initial; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; opacity: 1; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; visibility: visible; zoom: 1;" width="auto" /></span></div>H2Optionshttp://www.blogger.com/profile/17866211551152350212noreply@blogger.com0tag:blogger.com,1999:blog-933973642078676685.post-54852621618981890722011-09-08T18:52:00.000-07:002011-09-08T18:52:05.733-07:00<span class="Apple-style-span" style="background-color: white; color: #666666; font-family: Arial, Helvetica, sans-serif; font-size: 12px; line-height: 20px;"></span><br />
<div class="postContent-top" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-color: rgb(204, 204, 204); border-bottom-style: dotted; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 3px; padding-left: 5px; padding-right: 5px; padding-top: 5px;"><h2 style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-family: arial !important; font-size: 24px; line-height: 1.1em; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-rendering: optimizelegibility; width: 570px;"><a href="http://www.randomactsofkindness.org/smithfield-foods-sfd-buying-opportunity/" style="-webkit-transition-delay: initial; -webkit-transition-duration: 0.3s; -webkit-transition-property: color; -webkit-transition-timing-function: ease-out; background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #6089a5; font-family: Georgia, 'Times New Roman', Times, serif; font-size: 24px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: none; outline-width: initial; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: none; visibility: visible;"><span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-family: arial !important; font-size: 24px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">Smithfield</span> Foods (SFD) --- Buying Opportunity?</a><span class="editLink" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: red; cursor: pointer; font-family: arial !important; font-size: 17px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"> </span></h2><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">Posted by: <a class="author-link" href="http://www.randomactsofkindness.org/Harold/" style="-webkit-transition-delay: initial; -webkit-transition-duration: 0.3s; -webkit-transition-property: color; -webkit-transition-timing-function: ease-out; background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #6089a5; font-family: Georgia, 'Times New Roman', Times, serif; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: none; outline-width: initial; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: none;" title="View all posts by">H</a>2Options <span class="post-date" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">on Sep 08, 2011 <a href="http://www.randomactsofkindness.org/smithfield-foods-sfd-buying-opportunity/?index_php?view=article&print=1&tmpl=component" style="-webkit-transition-delay: initial; -webkit-transition-duration: 0.3s; -webkit-transition-property: color; -webkit-transition-timing-function: ease-out; background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #6089a5; font-family: Georgia, 'Times New Roman', Times, serif; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: none; outline-width: initial; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: none;" target="_blank" title="Print"><img alt="Print" border="0" name="Print" src="http://www.randomactsofkindness.org/images/M_images/printButton.png" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-style: none; border-bottom-width: 0px; border-color: initial; border-color: initial; border-left-style: none; border-left-width: 0px; border-right-style: none; 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</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"></div><div class="userAvatar" style="background-attachment: initial; background-clip: initial; background-color: initial; background-image: url(http://www.circle-plus.biz/templates/rt_zephyr_j15/images/overlays/light/box1-bg.png); background-origin: initial; background-position: initial initial; background-repeat: repeat repeat; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; float: right; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: -92px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 8px; padding-left: 8px; padding-right: 8px; padding-top: 8px;"></div></div><div class="postContent-text" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 10px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 10px; padding-left: 0px; padding-right: 0px; padding-top: 10px;"><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">Today I would like to share a bit of what I do for a living as an equity options trader. I try to find opportunities that make sense from both a fundamental and technical perspective whenever possible. </div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">For example, I consider my analysis of Smithfield Foods (SFD) fits this criteria. On the fundamental side, SFD reported first quarter earnings earlier today that beat Wall Street expectations by jumping 50% to $0.69 per share, while revenue climbed 7% to $3.1B. Revenues were boosted by increased sales in the company's pork segment coupled with higher hog prices. Although Smithfield expects feed prices to continue to be elevated, the company maintains that they have sufficiently hedged its expenses for FY 2012 and sees "strong momentum" ahead. Unfortunately, SFD missed expectations on its 1Q sales by $100M, as Wall Street was looking for $3.2B. </div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">Given the overall strong "fundamental" case for SFD, you would think that its stock price would naturally go up today. However, as often is the case, Wall Street looks for perfection. They often "shoot first" and ask questions later. I believe this is what happened today with SFD. As can be seen from the 9-month daily chart below, SFD plunged 7.64% at the time of this writing to $20.43 per share! Looking at the chart more closely reveals a technical level that SFD reached at around $20.25 per share. See that on August 9, 2011, SFD hit a low of $18.04. You will notice a trend line drawn from that point through today's close. Notice that SFD's stock price remains above the trend line for this entire period. It came close to penetrating on August 26 at $19.50 and again on September 6 at $20.18. </div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: underline;">THE DECISION</span></strong></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">As an equity options trader, I now have to make several decisions on SFD. Do I believe in the company's fundamental prospects to gain "strong momentum" in the future quarter? Do I believe SFD's stock price will remain trending higher as its technical chart <em style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">potentially</strong></em> projects? Am I willing to take a risk on SFD? What kind of option trade should I make if I decide to "go long" SFD? Based on the information discussed above, I decided to place an option trade on SFD!</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: underline;">THE TRADE</span></strong></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">One of the main reasons I trade equity options is due to their flexibility. I recommend reading Michael Thomsett's "Getting Started in Options" to get a better understanding of the world of options and its many strategies. <a href="http://www.amazon.com/Getting-Started-Options-Michael-Thomsett/dp/047117758X" style="-webkit-transition-delay: initial; -webkit-transition-duration: 0.3s; -webkit-transition-property: color; -webkit-transition-timing-function: ease-out; background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #6089a5; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: none; outline-width: initial; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: none;">http://www.amazon.com/Getting-Started-Options-Michael-Thomsett/dp/047117758X</a></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">One of the strategies detailed in the book is what is called a "bull call debit spread". I placed the following trade earlier today on SFD when the stock was trading at $20.30: </div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">I purchased +3 January 20 Calls for $2.35 and simultaneously sold -3 January 22.50 Calls at $1.22. Each option contract equates to 100 shares of SFD. So, the purchase of 3 January 20 calls is simply 3 x 100 x $2.35 = $705. Similarly, I sold 3 January 22.50 calls: 3 x 100 x $1.22 = $366. Taking the $705 purchase less the $366 received leaves $339. $339 is the maximum loss you could have on the trade. The maximum gain you can attain is $411. (Keep in mind this example does not include trading costs). Below I show the mechanics of the trade...</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">BUY CALL STRIKE @ $22.5 <span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"> </span></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: underline;">(LESS) SELL CALL STRIKE @ $20.0 </span></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">= $2.50 <span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"> </span></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: underline;">(LESS) NET DEBIT $1.13 (Buy Premium $2.35 less Sell Premium $1,22)</span></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"> MAXIMUM RISK = $1.37 </div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"> x # CONTRACTS 3 </div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: underline;"> x # SHARES @ 100 </span></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"> MAX $ RETURN = $411.00 (MAX Risk $1.37 x 3 Contracts x 100 shares)</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"> MAX % RETURN = 121.2% (MAX Risk $1.37/Net Debit $1.13)</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"> MAX $ RISK = $339.00 (Net Debit $1.13 x 3 Contracts x 100 shares)</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"> BREAKEVEN STOCK PRICE = $21.13 (Buy Call Strike $22.5- MAX Risk $1.37)</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: underline;"><br />
</span></strong></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"><span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; text-decoration: underline;">CONCLUSION</span></strong></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">I like this particular trade set up because of the flexibility it gives me. I know what my maximum risk and reward is. It also gives me sufficient time, in case the trade initially works against me as the option does not expire until January 2012. Keep in mind, I can also close the trade at any time before option expiration and realize whatever profit or loss that may occur.</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;">Twitter: H2Options</div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">DISCLAIMER: This information is for illustrative purposes only! Option trading involves substantial risks. <span style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; color: #5c5c5c; font-family: Verdana, Arial, Helvetica, sans-serif; font-size: 12px; line-height: 18px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;">The performance of, or any investment is not guaranteed. Past investment performance is not indicative of future investment performance. The value of investments and the income from them can fall as well as rise and are not guaranteed. You may not get back the amount originally invested.</span></strong></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><strong style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"></strong></div><div style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; border-bottom-width: 0px; border-color: initial; border-left-width: 0px; border-right-width: 0px; border-style: initial; border-top-width: 0px; font-size: 12px; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 4px; padding-left: 0px; padding-right: 0px; padding-top: 4px;"><img alt="" class="" height="auto" smartload="5" src="http://www.randomactsofkindness.org/images/SFD-09-08-11.png" style="background-attachment: initial; background-clip: initial; background-color: transparent; background-image: initial; background-origin: initial; background-position: initial initial; background-repeat: initial initial; border-bottom-style: none; border-bottom-width: 0px; border-color: initial; border-color: initial; border-left-style: none; border-left-width: 0px; border-right-style: none; border-right-width: 0px; border-style: initial; border-top-style: none; border-top-width: 0px; border-width: initial; font-size: 12px; margin-bottom: 0px; margin-left: 0px; margin-right: 0px; margin-top: 0px; opacity: 1; outline-color: initial; outline-style: initial; outline-width: 0px; padding-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px; visibility: visible; zoom: 1;" width="auto" /></div></div>H2Optionshttp://www.blogger.com/profile/17866211551152350212noreply@blogger.com0tag:blogger.com,1999:blog-933973642078676685.post-88533395731339203822011-09-03T12:26:00.000-07:002011-09-03T12:26:18.493-07:00Sell in May and Go Away...Time to Come Back?Earlier this year I thought I would for once follow the rest of the "big money" adage of "Sell in May and go away". As it turned out, this wound up being a wise move. Take a look at the weekly chart of SPX from the 3/2/09 low of ~666 to the breaking of the uptrend ~1300 on 5/31/11. Note that in May of 2010, a sell off occurred then too, but did not break the upward trend. We made a couple of attempts to re-establish the upward bias in late June 2011 and early July only to fall off considerably for most of August. Now that September has arrived, we've seen additional selling, giving back a good portion of some late August portfolio manager "window dressing". The technical picture certainly reveals a broken market. Question is, will the slide continue? The macro fundamentals are certainly worrisome...stubbornly high US unemployment, the euro mess, China slowing, etc. Yet most companies continue to deliver on earnings and grow their markets in spite of all the world's problems. Many think this is about to change, as the macro picture will eventually dim company prospects going forward. Growing concern over what Merkel and Van Rompuy will say on Monday regarding the euro-zone debacle has many believing this will really put our global markets in a tailspin. Don't forget to throw in President Obama's job speech on Thursday for good measure. Doom and gloom pundits are certainly coming out in droves, and why not, given the continued rise in gold and silver prices while our currencies weaken. The world as we know it may indeed be coming to an end very soon. But another part of me continues to think about what the "big money" guys and gals are going to do. After all they should be returning from the Hampton's next week! I would not be surprised that the markets take a dive this coming week, while the "big money" is quietly waiting to "pull the trigger" for some spectacular buys. We shall see. <img src="file:///C:/Users/Harold/Desktop/Sell%20in%20May%20Go%20Away_Are%20We%20Back_files/image002.jpg" /><br />
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