Even though the market was down HUGE today, it was a great trading day for us. And, we made good money!!
It all started with going cash last week, and especially on Tuesday with this post!! With volatile conditions as what we’ve been seeing lately, being in cash position is very powerful. It not only saves us the stress from wondering where the market is going to go next. It also gives us lots of “ammunition” to work with once the market finds a direction.
We started out the day by taking some quick profits on AMZN when it made a jump in the morning with good news from BIDU and AAPL.
AMZN Aug 90 calls, ZQNHR, at $2.85, +9.6% (took some off)
AMZN Aug 90 calls, ZQNHR, at $3, +15.4 (all out)
You might not think these are big profits, but, AMZN closed down more than $2 and those options are now at $1.3/$1.4 (bid/ask)! Less than half of what we cashed them out for! Those options traded as high as $3.2 today. In volatile conditions, you have to protect your profits. Taking things partially off the table can allow you more luxury to feel out the market.
Once the market started to go down with determination and force, we got ourselves into some profitable puts. These were all cashed out by the EOD with good profits:
FCX Aug 85 puts, FCXTQ, at $2.2, +12.8% (partially out)
MRO Aug 60 puts, MROTL, at $4.6, +35.3% (partially out)
MRO Aug 60 puts, MROTL, at $5.2, +53% (all out)
RIMM Aug 210 puts, RFYTB, at $4.2, +16.7% (partially out)
RIMM Aug 210 puts, RFYTB, at $4.5, +25% (more out)
FCX Aug 85 puts, FCXTQ, at $2.25, +15.4% (more out)
RIMM Aug 210 puts, RFYTB, at $4.3, +19.4% (all out)
FCX Aug 85 puts, FCXTQ, at $2.05, +5.1% (all out)
The MRO options traded as high as $5.3, which I was $0.1 away from getting that high. The RIMM options traded as high as $4.5, which I got. Those FCX’s traded as high as $2.85; hey, I’m only human; but, they closed at $1.95! =)
The reason why I’m writing this post is to emphasize the virtue of having cash, even if you have to cut some losses. “Cash is King” and the market will be there to present more opportunities to make money! And, also, when you’re not sure, take positions off the table PARTIALLY! 1/2, 1/3, even 1/4 at a time. This will allow you to more leisurely “feel” the market. You might not get it right the first, or the second time, but, the third and fourth time are probably pretty close. Or, you might get it right the first time, and, the market goes the other direction on you. If that happens, you’ll find yourself less likely to hang on to your position (because it is smaller) and do the right thing by getting out!
So, it was a fun day! And, now I’m back to hold 85-88% cash!! Like I said in my earlier post, “It is always a great feeling when youâ€™re making money on a down day, especially one as big as this!!”
ps. Wang’s World is going “private” in August, most likely starting 8/1! The “Happy Trades!!” page will no longer be accessible to the public, at least not the “live” version (I might consider posting closed trades on the weekend). You can find out how to get in on the 1st-round membership with 30% off the regular price by clicking here: Wang’s World Going Private!