Trade Placed: March 2009

Today's trading was range bound. I didn't get the sell off on the open I hoped for and the VXN was slowly bleeding out, taking the higher premiums along with it. With only 16 days until expiry, its the time where premium, volatility, and time decay all battle it out. If I didn't place a trade today, and the market were to rally or remain flat, there wouldn't be any premium left in the options to make them worth selling, or any worth selling would be closer to the money than I would like. Since the MNX managed to stay in the green today, I placed the trade at the close and got filled at a slightly lesser premium than the other 84 strike trade from last week (.17 vs. .19). The trade is still 22% otm, so I feel it's still a safe play.

Index level: 108.06
Sell to open: 10 Mar 09 84 Puts
Credit received: .17
Initial Margin req.: $8,430.00
Commission: $12.50
Net credit: $157.50
Days to expiry: 16
Simple return: 1.87%
Yield: 42.62%
% to ITM: 22.27%

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