Steve Osborne's Journal

Established long oil position with remaining cash.

The trend is still upward, almost flat, but my long oil position representing a small fraction of my portfolio will constitute a temporary source of profit whenever oil spikes and if oil doesn't spike, so much the better for my stocks and bonds.
 
ERRATA:
The 09-25-05 08:43 PM post contained two errors. The information should be

8 OCT05 OYMC 105 calls at $470 each (=$3,760) instead of
4 OCT05 OYMC 105 calls at $940 each (=$3,760).

8 x OCT05 OYMC 105 call @ $520 = $4,160.00 instead of
4 x OCT05 OYMC 105 call @ $1,040 = $4,160.00
 
THE WEEK IN REVIEW

Stable oil prices contributed to stock market gains but didn't do much to appease inflationary fears. The bond market was particularly weak.
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Transactions made:

Sept 26th, on market open
- sold 1 DEC05 DX 92 put at $3,440 to liquidate a short position
- bought 1 DEC05 TY 107 call at $3,280 to open a long position
Sept 27th, on market open
- bought 1 DEC05 CL 70 call at $2,100 to open a long position.
Sept 29th, on market close
- sold 4 OCT05 YM 105 calls at $775 each (=$3,100) to liquidate half of a long position.
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Portfolio Value:

Sept 30th (at market close)
- Cash = $3,451.25
- 1 x DEC05 CL 70 call @ $2,070 = $2,070.00
- 1 x DEC05 TY 107 call @ $3,000 = $3,000.00
- 4 x OCT05 YM 105 call @ $870 = $3,880.00
Total = $12,301.25
 
UPDATE

Early last week, markets were showing signs of needing direction and after the release of strong economic data, the immediate reaction of stocks, bonds and oil prices was often to go down at the same time which indicated a fear of higher interest rates -- no other interpretation -- but then, later in the day, stock indices would rise while oil would go sideways and bonds down.

Stocks indices are not oversold anymore and the weakness accumulated in bonds has already started to spread to stocks, hence the decision to liquidate remaining long positions in stocks this morning.

Long bond position with December contract has not been liquidated because bonds are oversold; and long oil position with December contract is maintained because the long term trend for oil is still positive and a long oil position acts as a hedge to the long bond position.
 
Thanks, although I feel worse than before. Hard to make profitable calls with markets that just sit there, doing nothing, especially with options.
 
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