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UPDATE 9/4/2012 LATE NIGHT BEFORE MIDNIGHT

TODAY WAS A WEIRD MARKET DAY FOR SURE, WITH WORK BOGGING ME DOWN TODAY, I APOLOGIZE THAT I COULDN’T POST THIS UPDATE ON A TIMELY BASIS.

WITH THE REVERSAL BACK UP MID AFTERNOON TODAY 9/4/12 WE FIGURED IT WAS TOO RISKY TO CONTINUE TO HOLD UNHEDEGED SPY SEPT7 141 PUTS. WE TRIED TO SEE IF WE HAD MORE DOWNSIDE TODAY, IF THAT HAPPENED WE WOULD HAVE SOLD 139 SPY SEPT7 PUTS AROUND .65 TO 1.00 EACH AS A HEDGE AGAINST OUR SEPT7 141 PUTS, BUT THE REVERSAL BACK UP RUINED THAT ATTEMPT.

AFTER THAT ATTEMPT TO WAIT FOR LOWER PRICES FAILED, PLAN B CAME INTO EFFECT.

PLAN B WAS  THE DRAGHI AFTER MORNING PILL!

I SAY THAT BECAUSE DRAGHI FROM THE ECB IS GOING TO IMPREGNATE THE MARKET YET AGAIN WITH MORE OF HIS BULLSHIT PROMISES THIS WEEK IN THE ECB CONFERENECE. WE NEEDED TO MAKE SURE THAT OUR POSITION IN THE 141 WEEKLY PUTS WASN’T DROWNED OUT AS HIS SPEECHES TEND TO DO JUST THAT TO THE BEARS LATELY.

IN ORDER TO MAKE SURE OUR ROLL WAS AN APPROPRIATE ROLL, WE CHOSE AN UNTRADITIONAL ROLL. THIS UNTRADITIONAL ROLL TOOK TWO TRADES TO EXECUTE.

Date Activity Quantity Symbol Description Price Comm. Fees 1 Amount
09/04/12 Bought to Open 30 SPY Put

Spy Sep 22 2012 140.00 Put
SPY Sep 22 2012 140.00 Put $1.72 $13.45 $0.75 -$5,174.20
09/04/12 Sold to Open -30 SPY Put

Spy Sep 22 2012 139.00 Put
SPY Sep 22 2012 139.00 Put $1.36 $4.50 $0.91 $4,074.59
09/04/12 Sold to Close -10 SPY Put

Spy Sep 07 2012 141.00 Put
SPY Sep 07 2012 141.00 Put $0.80 $10.45 $0.29 $789.26

FIRST WE SOLD OUR (10 CONTRACTS) 141 SEPT7 SPY PUTS FOR .80 EACH

SECONDLY AFTER THAT EXECUTED WE BOUGHT (30 CONTRACT SPREADS) OF SEPT22 SPY 140-139 DEBIT PUT SPREADS AT .36 EACH.

SO BASICALLY THIS COST WORKS OUT AT

10X .80 CREDIT OR 80 X10=800 FOR THE PUTS WE SOLD TO CLOSE FOR CREDIT

AND THEN BOUGHT TO OPEN FOR 30 CONTRACT SPREADS AT  .36 OR 36 X30 OR 1080

WE DID THAT AT A 3 FOR 1 RATIO OFF OF THE OLD SEPT7 141 PUTS INTO THE NEW 140/139 SEPT22 DEBIT PUT SPREADS.

OUR TOTAL COST OF THIS ROLL NOT INCLUDING COMMISSIONS WAS

1080 DEBIT FROM BUY TO OPEN SEPT22 140-139 DEBIT PUT SPREAD 30X36=1080

MINUS

800 CREDIT FROM SELL TO CLOSE SEPT7 141 PUTS 80X10 =800

EQUALS

280 NET DEBIT EXTRA COST

OUR NEW COST STRUCTURE IN THIS ROLL AND PREVIOUS ROLLS IS NOW AS FOLLOWS:

3.70 ON ORIGINAL 144 PUTS

-.55 CREDIT ON 1ST ROLL

-.38 CREDIT ON 2ND ROLL

=2.77 NET COST

-.07 ON ROLL  TO 141 SEPT7 141 PUTS

=2.70 THEN

-.80 TODAY

=1.90

THEN .36 X3 =1.08 WHICH IS

+.28 ABOVE THE SOLD .80 CREDIT AND THEN TAKE THAT .28/3 =.0933 EXTRA

=1.90 + 1.08

=2.98 TOTAL COST

OUR MAX VALUE ON THIS ROLL WILL BE 30X100 =3000

SO WE WILL STILL HAVE THE CHANCE TO BREAKEVEN OR SLIGHT .02 PROFIT IF SPY LESS THAN 139 ON SEPT22

SO WHY THE HELL DID WE CHANGE THE RATIO AND CREAT A SPREAD? WE CHANGED BOTH TO BE PREPARED FOR BOTH OUTCOMES IN THE NEXT TWO & 1/2 WEEKS.

IF DRAGHI POSITIVELY SURPRISES AND CAUSES THE MARKETS TO RALLY, WE WILL HAVE GREATER FLEXIBILITY WITH OUR HIGHER DELTA 140/139 DEBIT PUT SPREAD AND HIGHER OFFSET SOLD 139 PUTS AS WELL. IT WILL PROTECT US BETTER WITH A ROLL IF WE HAVE TO ROLL YET AGAIN. I SAY THIS  BECAUSE WE CAN BRING IT BACK IT DOWN FROM 3 TO 1 RATIO LIKE IT WAS BEFORE THIS ROLL FROM 1 TO 3 RATIO AS WELL, OR DO ANYTHING ELSE IN BETWEEN AT ALL TIMES BEFORE EXPIRY.

WHEN I SAY PROTECT US BETTER, OUR 140/139 SPREAD WILL PROTECT BETTER THAN THAT OF A TRADITION 1X1 ROLL. A 1X1 ROLL INTO SEPT22 140-137 WHERE EVEN COST WOULD HAVE POSSIBLY BEEN HAD, THE SPY WOULD HAVE TO CRATER BELOW 137 BY SEPT22. IN OUR PLAN OF ACTION ON 3X1 RATIO ROLL THE SPY ONLY HAS TO CRATER TO BELOW 139 TO REACH ALMOST THE SAME VALUE REACHED ON A TRADITIONAL 1X1 ROLL OF 140-137 MENTIONED ABOVE.

NOW, ON THE FLIP SIDE,  IF DRAGHI NEGATIVELY SURPRISES THE MARKETS AND CAUSES THE MARKETS TO CRASH, OUR STILL FAIRLY NICE  140/139 SEPT22 3X1  RATIO ROLL FROM OUR SIMPLE 141 SEPT7 PUTS WILL ALLOW US THE FLEXIBILITY TO ROLL YET AGAIN EARLY OR LATER INTO YET ANOTHER OPPORTUNITY TO MAKE EVEN MORE MONEY IF THE MARKET DICTATES.

MORE UPDATES WILL BE POSSIBLY BE POSTED LATER, AND WE ARE ALWAYS ON TOP OF THIS TRADE AND OTHERS LATELY. NO MORE MISSED OPPORTUNITIES!!!!!!!!!!!!!!!!

SORRY FOR ANY TYPOS, GRAMMATICAL ERRORS AND SUCH AS WAS WRITTEN VERY LATE, AFTER A VERY EXHAUSTING DAY.

THANKS FOR YOUR SUPPORT FRIENDS!

WELL WISHES TO ALL!

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AUG30 3:44 PM

WELL WE ROLLED FROM OUR AUG31 142 PUTS INTO SEPT7 141 PUTS AT .07 CREDIT

THIS ROLL WAS DONE AT LEAST 20 MINUTES AGO AROUND 3:40PM

THE RUN UP NEAR THE END OF THE DAY CAUSED US TO BE PRUDENT AND BUY TIME UNTO NEXT WEEK IN CASE THE SPY RUNS UP TOMORROW INTO JACKSON HOLE SUMMITT

WE WILL LEAVE OUR AUG31 139 SPY PUTS WE HAD SOLD AGAINST OUR AUG31 142 PUTS. IT IS NOW A CALENDAR SPREAD, UNTIL TOMORROW WHEN WE CLOSE, ROLL,  OR LET EXPIRE ON FRIDAY.

THE PLAN IS TO NOW TO HAVE OUR NET COST

3.70 ON ORIGINAL 144 PUTS

-.55 CREDIT ON 1ST ROLL

-.38 CREDIT ON 2ND ROLL

=2.77 NET COST LAST WEEK

-.07 ON ROLL TODAY TO 141 SEPT7 141 PUTS

=2.70 NOW

NEXT WEEK OR TOMORROW WE PLAN ON SELLING SEPT7TH 138 PUTS AGAINST OUR OPEN LONG 141 SPY PUTS POSITION FURTHER LOWERING OUR NET COST BY MAYBE ANOTHR 20 TO 50 CENTS OR SO.

THIS IS A RINSE AND REPEAT PROCEDURE UNTIL WE DIG OURSELVES OUT OF THIS POSITION.

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PERFORMED FIRST- WAS A ROLL INTO SPY AUG31 142 PUTS FROM THE AUG24 143 PUTS AT .38 CREDIT.

OUR NET COST NOW IS

3.70 ON ORIGINAL 144 PUTS

-.55 CREDIT ON 1ST ROLL

-.38 CREDIT ON 2ND ROLL

=2.77 NET COST NOW

NOW AFTER THAT ROLL LETS SELL AUG31 139 PUTS AGAINST OUR LONG 142 PUTS AT .20 CREDIT

BRING OUR NOW TOTAL NET COST TO 2.57 DEBIT.

IF SPY LESS THAN 139 BY END OF NEXT WEEK WE WILL STILL HAVE A PROFIT OF AROUND 15%

BOTH OF THESE ROLLS HAVE EXECUTED

Order Details

Action Amount Option Price Duration Qualifiers
Sell to Open 10 SPY Aug 31 2012 139.00 Put Limit 0.20 Day None
Quote SPY   141.53   0.86 Bid 141.52 Ask 141.53 Volume 73,038,254
SPY AUG 31 2012 139 PUT
Bid 0.20
Ask 0.21
Last 0.20
Change -0.27 [-57.45%]
Volume 26,722
Delta -0.15
Open Int 13,171
Desc SPY Aug 31 2012 139.00 Put

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POSITION WAS ROLLED INTO AUG24 $SPY 143 PUTS 10 COUNT SAME AS ROLLED FROM AND .55 CREDIT EACH.

WE ANTICIPATE A BETTER ROLL OPPORTUNITY TO COME THIS WEEK ON A SMALL PULLBACK, OR MAY JUST HEDGE OUTRIGHT IF BIG ENOUGH SWING DOWN.

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THIS IS JUST THE OPENING TRADE, WE WILL LIKELY HEDGE OR CLOSE OUT THE POSITION VERY SOON AFTER THIS PURCHASE.

WE ENTERED 10 CONTRACTS @3.70 WITH A VERY HIGH DELTA

Your Order Has Been Submitted
Order Details
Action Amount Option Price Duration Qualifiers
Buy to Open 10 SPY Aug 18 2012 144.00 Put Limit 3.70 Day None
Quote SPY   140.45   0.83 Bid 140.45 Ask 140.46 Volume 37,270,964
SPY AUG 18 2012 144 PUT
Bid 3.70
Ask 3.76
Last 3.82
Change -0.65 [-14.54%]
Volume 144
Delta -0.88
Open Int 1,835
Desc SPY Aug 18 2012 144.00 Put
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