I still have my calls on Yahoo, my 170's expired on Friday and were just alright we got out at 24$, but others like INKT and MER YAHOO I had added on almost all of them some consideralbel number of calls at 630-40 area on DOT. The small rally on DOT has helped me to average out some high premiums I had paid earlier on INKT for example, like with INKT 115's that are making some decent returns INKT 150's which lost 60% of premium within one day of my purchase are doing alright. Now what I have done is to sell 850 out of the money calls on DOT, with my exposure on internets on individual stocks I thought it would be helpful to have some hedge, if the sector moves up I will be making a lot of return on my calls purchased at 630 area on DOT, if it breaks 650 I will get out of some of my calls which are not in leading stocks and are more speculative in nature.I believe internets will have shakeup and the real companies like AOL YAHOO and others will out perform anything with .com at the end. The decision to have entered at 630 looks alright and the DOT calls sold as a hedge have provided me with little insurance against lost of premium by May.
I have atleast 50% of my premium now protected, at 850 some of my stocks would be much higher andI would add if 725 is taken out but for me it is always good to have some kind of hedge, in case of things go wrong my DOT 850's call premium will all but disappear.
The index protection is quite risky if you don't have a full representation in your individual internet stocks, I have seen that index may move up without the stocks that one isl ong, so one needs to mimic the index with best of effort, in short it is laways good to have some kind of hedge in this market for me that is nearly 200 points away on DOT but has given me enough not to worry if internets become wobbly, I will not let my present new positions go wasted if I see internets again under pressure I will get out and get in at 600 area. MER I would think has made this pull back but will probably go back up to recent old high of 100, I hope this happens before the expiry.. If 900 is taken out I will certainly sell 950 May index or little lower to make some money against my long position in individual banks. |
