Monthly Archives: August 2012
Closed Position Report- First Solar (FSLR)
8/10/12 Sale of FSLR – Call Assigned $18.00
8/6/12 Purchased FSLR at (17.93)
Net Gain on Sale of Stock $ .07
8/6/12 – Sell to Open Aug 10th $18 call .54
Total Gain on FSLR $ .61
Return % 3.4%
If $10,000 invested, dollar return would be $366. Based on
$10,000 invested, you would have bought 600 shares.
3.4 % return for a 1 week holding period.
Q&A With Chuck Hughes
You have closed out Hum today with a large loss. Should’t the stop loss have kicked in earlier to limit the losses?
Answer:The decline occurred too quickly.
I didn’t get alert to close HUmana spread on Aug 3rd. This is also not posted on your website. Did you ever send it?
Answer:Yes an alert was sent out.
Humana was declining steady for last few weeks. Finally just two weeks before option spread expiration it dropped for more than 2 points in one day. All the time it was rated buuy, and it is still rated buy, although option spread is wothless and it lost 95% of the value (more than $9,000). Can you please explain that? You advocate money management rules in your educational videos, so I would appreciate if you explain us what was this trade about, since I lost more than $9,000 on this trade
Answer:There was no way to predict that HUM was going to drop so sharply in such a short period of time. It went from a profitable trade to a loser in a few trading days. Some trades will turn into losers and that’s why we use limited risk trades with options.
Closed Position Report- Aruba Networks (ARUN)
8/8/12 Sale of ARUN $15.39
7/31/12 Purchased ARUN at (14.26)
Net Gain on Sale of Stock $ 1.13
Return % 7.9%
If $10,000 invested, dollar return would be $791. Based on
$10,000 invested, you would have bought 700 shares.
7.9 % return for a 2 week holding period.
Closed Position Report- US Steel (X)
8/3/12 Sale of X –Call Assigned $21.00
7/9/12 Purchased X at (20.83)
Net Gain on Sale of Stock $ .17
7/10/12 – Sell to Open July 13- $21 Call .24
8/2/12 – Sell to Open August 3rd $21 Call .22
Net Option Premium Collected .46
Total Gain on X $ .63
Return % 7.3%
If $10,000 invested, dollar return would be $315. Based on
$10,000 invested, you would have bought 500 shares.
3 % return for a 4 week holding period.