Tuesday, April 26, 2005


I didn't do much trading today. I tried to get out of AFC at a small loss. This is the last earnings play I'm still holding. The spread was huge in this option. I offered in the middle, but never got lifted. I don't know why I want to get out of this position. Earnings don't come out until Friday. It's probably a good idea my offer never got lifted.

I also put in a bid at 2.80 for DNA September 85 Calls. According to optionetics' model it has a high theoretical edge. Eventually I cancelled my bid though, other than the theoretical edge I really didn't have a reason to buy. Furthermore, I have a general phobia against buying out of the money premium. I know that more than likely each time I do it I will lose money. If the expectation is high I should still be willing to lose money 2 out of 3 times, assuming I'll make it up every 3rd trade, I guess. Probably in this case it was a good idea to cancel the bid...I would have lost 30 cents by the end of the day.

I was tempted to buy QQQQ puts yesterday...wish I had. It just seemed to easy to keep trading counter-trend in the QQQQ's every day..I was concerned that my last 2 QQQQ successes in a short time frame was making me arrogant so I chose not to trade yesterday. Even though the market sold off today, I didn't buy either. I think it has been so easy to just buy every dip and flip the next day lately...the masses are going to catch on soon and get crushed. Maybe I'm out thinking the situation though? I'll be checking the Put/Call ratio tonight. If it ticks up again, I may be looking to buy if the market is down much tomorrow.

My May short-premium portfolio was down slightly today. I could get out of my May portfolio for a small loss at this point. If I trade around it a little I could maybe even get out for a push. I'm tempted to get out and wait for the easy money to return...it always returns right?


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