Trade Placed: June 2009

I placed this put trade last Friday. Again, I was trying to capture dwindling premium in this up-market. Since the market has continued higher, I will look into rolling out of the 1550 short call (which has less then 5% and 16 days until becoming itm), unless the market begins to give back ground. I believe we may be seeing the first signs of the market beginning to capitulate - the financials are no longer leading the way higher, the market didn't scream higher on today's mortgage report, and more and more talking heads are speaking of the need for a pullback. Of course, there's always the adage that the market can stay irrational a lot longer than you can stay solvent. That's why I will look into rolling out the 1550 call to next month.

Index level: 143.55
Sell to open: 1 June 09 1150 put
Credit received: 1.55
Initial Margin req.: $10,502.50
Commission: $1.25
Net credit: $153.75
Days to expiry: 20
Simple return: 1.46%
Yield: 26.72%
% to ITM: 19.88%
Probability of expiring ITM: 3.75%

Please view my disclosure on the bottom of this blog.