Weekly Range:
- Open 105.89
- High 117.05
- Low 104.05
- Close 116.85
- Point change +10.38
- % Change from last week close +9.75%
MNX rallied for the week and managed a respectable gain. However, is this just a bear market rally that will be beat back down in the coming week? After a 4 day 10% rally, the market no doubt will be looking for a rest and does anyone really believe that we have seen the absolute bottom of this crisis? Hardly! Since I am short puts for March and April, the week's gain has helped the puts to lose value (resulting in profit for me). While this is just what I want to happen, it has also decreased the premium I could receive for other April strikes. The VXN has dropped about 14% on the week, decreasing the premium available on put options. However, the VXN is sitting right on its 200 day moving average that its held above since September, so I think it may attempt a rally next week. Also, in the coming week I will look to sell more April puts. There are only 33 days until April expiration, so now is the time I prefer to place trades since time decay will soon kick in, eating away at the premium of the put options. I still want to keep the short strike about 30% otm, so as of today I would look to sell the April 85 strike for about .22. If the market should start the week out on a down note, I would look to possibly sell a lower strike depending on the premiums available.
The March options I sold have only 5 days left until expiration and I expect to keep the full premiums I have received for them. If so that will make month 2 of gains for this strategy - I just wish I would have sold more of them!
