Trade Closed: Nov / Dec 2009

Today I closed a Nov 1400 put for .25 and the Dec 1250 put for .65. These were closed to free up collateral, and in the case of the Dec put, to take profits since the trade had made 82% of the max profit and still had 38 days left until expiry. In most cases, I follow this as a rule - once 75 - 80% of the max profit has been made in a relatively short time, close the trade to free up collateral and take profits, rather than waitng a few weeks to close the trade out for the remaining 20 - 25% of the profit. I do this to avoid locking up collateral for a prolonged period of time - it also allows me to look for another trade to place.

I have entered a gtc order to close the other Nov puts for .05.

Index level: 1762.29
Buy to close: 1 Nov 09 1400 put
Cost to close: .25
Initial Margin req.: $14,010.00
Commission: $1.25
Net debit: $26.25
Profit: $257.50
Days open: 10
Simple return: 1.84%
Yield: 67.09%
% to ITM: 20.56%
VXN level: 23.80%
Mmkt equivalent earnings @ 1.30%: $4.99

Index level: 1768.40
Buy to close: 1 Dec 09 1250 put
Cost to close: .65
Initial Margin req.: $12,495.00
Commission: $1.25
Net debit: $66.25
Profit: $302.50
Days open: 10
Simple return: 2.42%
Yield: 88.36%
% to ITM: 29.31%
VXN level: 23.53%
Mmkt equivalent earnings @ 1.30%: $4.45