59.60 (-0.33)

03/19/2010 – ThetaOptions IRA Portfolio – US Steel FEB/APR Calendar Closed – Profit $200

The IRA closed down the last portion of our original FEB/APR Diagonal today for $50 credit.  It turns out hat our move to lower the APR $60 strike to to $50 using a Calendar spread completely back fired on us as we painfully watch US Steel climb all the way back to $60 on APR OpEX.  We would have made another $300 had we NOT converted our original spread into a 50/50 Strike Calendar Spread .  However, we still manage to make a nice 40% profit on this trade. I still can’t believe the stock went from $65 to $43 back to $60 after their disappointing earnings call….we might need to place another bearish spread on them!

Filled Order:

SOLD -1 CALENDAR X 100 APR 10/MAR 10 50 CALL @.50 credit

Position: None

Profit Calc:

1/12 – Open FEB/APR Diagonal for $175 credit

2/3 – Converted to Calendar & moved strikes – $25 debit

3/19 – Closed Spread – $50 credit

Profit – $200

Risk/Reward: $500/$200 or 40% in (9) weeks within an IRA account

47.06 (-0.94)

02/03/2010 – ThetaOptions IRA Portfolio – US Steel FEB/APR Converted to Calendar

Wow, what a nice little play we had on US Steel a few weeks ago.  Although the stock actually dropped a little to far; it would be really nice if they had stalled out around $55.  While we could take our chances & wait another (2) weeks for that to happen, the IRA has decided to morph the spread into a safe little Calendar spread for about 0.25 debit. Please remember that we took $175 credit we we initiated this trade, so by giving up $25 our total profit is still $150 no matter what happens to the stock.

Filled Orders:

BOT +1 VERTICAL X 100 APR 10 50/60 CALL @2.18 debit

SOLD -1 DIAGONAL X 100 MAR 10/FEB 10 50/55 CALL @1.95 credit

Position: Look Mom, NO margin & positive Theta…with NO risk!

Profit: So far we’re guarantee to make $150, but let’s see if we can take another $75-125 over the next 3-4 weeks.

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