The Volatility Trader
105 W. Monument Street
Baltimore, MD 21201
Friday, December 15, 2006
Email – #237
Dear Volatility Trader Member,
With options expiration day upon us – and the AutoZone , St. Paul Travelers and the SPDR puts blowing out of the portfolio, we do have a little good news.
The other half of our strangle, the SPDR March 2007 $146 calls (SFB-XH) is now trading up 62%, helping to offset the losses from the December puts. For now, we will let this position ride.
What’s more, out Vornado Realty Trust January $125 puts (VNO-ME) are significantly in the money at $4 – a 43% gain from our entry at $2.80.
We will not let this trade go red, so if the stock begins to climb, expect an alert from me advising to close the position.
Finally, with three option positions biting the dust at expiration this month, we will no longer trade any front-month options, so as to fight time decay, while also ensuring no positions hit a wall at expiration.
I will be sending out a detailed alert regarding market conditions on Monday, along with a new trade I’ve been watching.
Exit is everything,
Mark Whistler
Current Portfoli
Payless Shoesource (NYSE: PSS)
Jan 07 $30 puts PSS-MF
Purchased: 12/6/2006
Current Price 0..45
Mattel (NYSE: MAT)
Jan 07 $25 puts MAT-ME
Purchased 11/22/2006
Current Price 2.60
S&P 500 (AMEX: SPY )
Mar 07 $146 calls SFB-CP
Purchased 11/16/2006
Current Price 2.15
Vornado Reality Trust (NYSE: VNO)
January $125 Puts VNO-ME
Purchased 12/6/2006
Current Price 4.00
