The LEAPS Option Trader
105 W. Monument Street
Baltimore, MD 21201
Friday, August 6, 2004
Email – #190
** Holding Steady
Yesterday’s sell of our Ultra puts was ultra profitable. I apologize for the one-liner telling you to sell, but I was about to get on a plane when I did a last minute check on prices and called Chris Matthai from a very noisy location.
Here is the rest of what I wanted to say. Our Ultra profits totaled $1.30 – based on our hard stop, the return was 60% in three days. Based on dollars invested, it was about 25%. More importantly, we made back almost three times what we lost in the Ciena trade that we closed out recently.
Our current positions are being affected by the market’s daily gyrations. Today, our Placer Dome “gold” position is doing well, while our technology positions are not faring well. Our energy spread position with Chesapeake Energy is very profitable and doing just what we want it to do. Our long term MITT on the S&P (AMEX: MCP) is still profitable – look for an opportunity to buy if the market continues its swoon.
I regret selling our Nasdaq puts a few days ago. But we were hugely profitable and with such a volatile situation, we moved our trailing stop up to protect profits – just the way it should work.
Right now the profits look to come from the short side. While this may seem obvious, and we have profited from this stance, it is not a sure thing. A weaker economic outlook virtually insures a new presidency and lower interest rates. In tandem, this could provide fuel for a rally beginning in the new year – the market never does what you think it will do. However, for now I will continue to scope out select short positions and communicate them to you immediately.
Regards,
Karim Rahemtulla
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Bio:
Karim Rahemtulla is the former Investment Director of The Oxford Club. The editor of The Smart Options E-Report, The Income Trader – A Covered Call Strategy and The LEAPS Option Trader, Karim is also a regular contributor to The Oxford Club Communiqué. His highly successful trading systems use covered calls and LEAPS to boost returns on blue chip stocks, and during the bear markets of 2000 and 2001, his picks outperformed the major market averages. Educated in England, Canada and the U.S. and fluent in several languages, Karim travels the world to find the best investment opportunities for our members.
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