Long Term Virtual Portfolio Review

Well I sure am glad we took out some callers yesterday!

It's always important to remember in the LTP that we have a clear and well-defined goal each month – we simply want to make enough money to cover our premium loss on the longer calls. Once we do that, we have won and we then need to decide if we have indeed turned bearish on our position or not. Stocks are not in the LTP because we think that they are worth LESS than our strikes – we pick a stock for the LTP because the strike price PLUS the cost of our leap contract is LESS than our target for the expiration date.

Of course, just because I feel very strongly that AXP will finish the year at $51.30 or higher, that doesn't mean I think it's going to get there in a straight line. You may love your baseball team and expect them to get to the World Series but that doesn't mean you are going to go around telling everyone they're going to go 162-0 this season does it? Sometimes you have your weakest pitcher going up against another team's best pitcher and one of your key guys is injured. You may want to win the game but it's doubtful that will be your big bet for the year right?

Just like following a team we love, we need to know our stocks' strengths and weaknesses, we need to know how they play at home (when the sector is moving with them), how they do on the road (when the sector is going against them), how they do after back to back wins (some teams and stocks have a lot of trouble winning 3 in a row)… You need to know what gives you real trouble (with AXP it would be slowing consumer spending) and what doesn't give you real trouble (credit card defaults) compared to the competition. You need to know your market (upscale global consumers) and know how they are behaving in order to get your own game face on etc. etc.

Most importantly, you need to know what you need to do to win. With AXP, we paid $6.30 for the Jan $45s and the stock is at $45. That means we need to collect at least .80 per contract between now and December to take out our long premiums. On 3/20, with the stock at about $46.50, we sold 80 $45 calls for $2.75 as that gave us good protection along with $1.25 of premium, more than we needed for the month. On 3/28 the stock had dropped all the way down to $43 but the calls were still worth $1 so we left them for the weekend as protection but on 3/31, at the end of the day, the $45 calls fell all the way down to .60 and there was no reason NOT to take a $2.15 gain.

Since we had gained 2 month's worth of premium in one month and since the market was actually up – we decided to see what would happen the next day rather than rolling down. The next day the market came flying back and AXP went all the way back over $47 but, on the 3rd, when they slipped a bit, we decided to 1/2 cover with the $47.50s for $1.10 as it's silly not to take $4.400 of pure premium when there's really no way it can hurt us. I regret not covering more and I may still buy back the $47.50s for .20 and cover with 1/2 the $45s for $1.12 to get another $4.400 for next week but still half covered and fairly safe even if we get a pop.

The point is I am on mission and on target and not once have I mentioned or cared about the value of my long call as AXP went up and down. I am focused on selling my contracts and maximizing my profits and I have a montly goal. When I am behind, I play conservative, when I am ahead, I can afford to take risks but we need to always have a plan and a goal and a way to monitor them – otherwise we are sailing blind in treacherous waters!

My old format doesn't work, I apparently have to reenter every virtual portfolio from scratch to clean up this mess so it will have to wait for a long weekend so please excuse this one. My premise is that we are flat tomorrow so these covers are what we want to take into the weekend but ask in the mornign how I feel overall:

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Info

Notes

Alerts

Issue
Symbol

Description

Qty

Trans
Date

Age

Net
Cost

Issue Price/
Total Change

Lower
Stop
Limit

Upper
Stop
Limit

Curr. Price/
Change Today

Gain/Loss

Market
Value

28 Long Calls

VAFAI

Jan 2009 45 CALL [AIG @ $45.56 $0.00]

11/2/2007

(282)

$31,360.00

$6.27

$1.18

$7.45

$-0.15

$5,890.00

18.8%

$37,250.00

Selling Apr $45s, now $1.58, then we will see.

VBOAO

Jan 2009 75 CALL [BA @ $78.43 $-0.17]

9/4/2007

(282)

$96,000.00

$12.00

$-2.50

$9.50

$-0.20

$-20,000.00

-20.8%

$76,000.00

Holding naked, worried at $78

WBMAD

Jan 2010 20 CALL [BMY @ $22.09 $0.58]

8/21/2007

(646)

$34,650.00

$4.33

$-0.33

$4.00

–

$-2,650.00

-7.6%

$32,000.00

Holding naked, expecting breakout.

VKTAL

Jan 2009 60 CALL [CAT @ $75.71 $-0.45]

7/13/2007

(282)

$44,930.00

$11.23

$6.72

$17.95

$-0.35

$26,870.00

59.8%

$71,800.00

Selling 30 $75s, now $2.10, then see next week

ZBKAF

Jan 2009 30 CALL [CCJ @ $37.42 $1.60]

2/5/2008

(282)

$13,610.00

$6.80

$3.30

$10.10

$1.30

$6,590.00

48.4%

$20,200.00

Will probably sell at $40 if they don't break 200 dma at $40.59

VZFAE

Jan 2009 25 CALL [COH @ $30.97 $0.19]

8/29/2007

(282)

$13,960.00

$6.98

$1.52

$8.50

–

$3,040.00

21.8%

$17,000.00

Selling May $30s if we break below $30, now $2.70

KOOAL

Jan 2010 60 CALL [DRYS @ $68.00 $-0.77]

1/29/2008

(646)

$39,010.00

$19.50

$5.50

$25.00

$-3.20

$10,990.00

28.2%

$50,000.00

Selling Apr $70s, now $1.75, then we'll see

HDHE

Aug 25 CALL [HD @ $28.38 $0.71]

11/30/2007

(128)

$14,600.00

$3.65

$0.90

$4.55

$0.60

$3,600.00

24.7%

$18,200.00

Seeing if they break $30, then sell may $30s hopefully

OZWAU

Jan 2009 7.5 CALL [HOV @ $11.34 $0.38]

11/15/2007

(282)

$16,810.00

$2.80

$1.70

$4.50

$-0.20

$10,190.00

60.6%

$27,000.00

Too stressful for LTP! Waiting for now, would like to sell 1/2 May $12.50s for $1.50, now .80

VNLAW

Jan 2009 17.5 CALL [INTC @ $22.08 $0.66]

1/3/2008

(282)

$36,410.00

$4.55

$0.90

$5.45

$0.95

$7,190.00

19.7%

$43,600.00

Selling 1/2 Apr $22.50s for .45, then probably naked unles we're worried

AXVGX

Jul 260 CALL [ISRG @ $353.88 $17.81]

3/7/2008

(100)

$58,660.00

$39.10

$65.70

$104.80

–

$98,540.00

168.0%

$157,200.00

Selling 10 Apr $360s, now $19, then probably 10 May $360s, now $27

VMDAJ

Jan 2009 50 CALL [MCD @ $55.85 $0.11]

1/11/2008

(282)

$35,410.00

$8.85

$-0.35

$8.50

$0.20

$-1,410.00

-4.0%

$34,000.00

Selling 20 Apr $55s at $1.25, then 20 May $55s, now $2.40

VKDAJ

Jan 2009 50 CALL [MDT @ $50.06 $0.29]

9/6/2007

(282)

$6,010.00

$3.00

$1.40

$4.40

–

$2,790.00

46.4%

$8,800.00

Holding naked, small entry and I think they are about to break out.

OZLAB

Jan 2009 10 CALL [MRVL @ $11.12 $0.21]

2/22/2008

(282)

$8,560.00

$2.85

$-0.35

$2.50

–

$-1,060.00

-12.4%

$7,500.00

Holding naked – I really think these guys will break out. XXX for a new entry

OZLAE

Jan 2009 25 CALL [MRVL @ $11.12 $0.21]

7/27/2007

(282)

$1,060.00

$0.35

$-0.35

$0.00

–

$-1,060.00

-100.0%

$0.00

Of course, sometimes I'm wrong…

NEMFJ

Jun 50 CALL [NEM @ $46.99 $0.22]

12/21/2007

(72)

$6,510.00

$1.30

$0.79

$2.09

$0.01

$3,940.00

60.5%

$10,450.00

These are kind of terror protection so no covers down this low.

VPAN

Jan 2009 70 CALL [PEP @ $71.70 $0.73]

2/8/2008

(282)

$18,910.00

$6.30

$-0.20

$6.10

$0.40

$-610.00

-3.2%

$18,300.00

Avoided the death cross, very strong, holding naked.

VPRAW

Jan 2009 17.5 CALL [SBUX @ $17.55 $0.08]

8/1/2007

(282)

$19,740.00

$3.29

$-0.72

$2.57

$0.02

$-4,320.00

-21.9%

$15,420.00

Holding naked, I refuse to believe it can go lower, very painful.

ZTHAC

Jan 2009 15 CALL [SHFL @ $5.55 $0.18]

9/12/2007

(282)

$1,810.00

$0.45

$-0.45

$0.00

–

$-1,810.00

-100.0%

$0.00

Dead and not worth saving.

ZMBAD

Jan 2009 20 CALL [SIGM @ $22.28 $-0.07]

3/12/2008

(282)

$29,740.00

$7.43

$-0.63

$6.80

$0.10

$-2,540.00

-8.5%

$27,200.00

Selling Apr $22.50s for .75

VZOAD

Jan 2009 20 CALL [THQI @ $21.35 $-0.84]

1/31/2008

(282)

$2,810.00

$2.80

$1.00

$3.80

–

$990.00

35.2%

$3,800.00

Selling May $22.50s for $1

XJXAC

Jan 2009 15 CALL [TIE @ $16.55 $-0.47]

4/10/2008

(282)

$20,010.00

$4.00

$0.00

$4.00

$-0.10

$-10.00

-0.0%

$20,000.00

Brand new, waiting and seeing.

VXUAN

Jan 2009 70 CALL [UTX @ $71.85 $1.04]

7/13/2007

(282)

$5,710.00

$3.80

$3.50

$7.30

–

$5,240.00

91.8%

$10,950.00

Holding naked, they are in a bad spot for selling (right between strikes), expecting a breakout

ZYGAN

Jan 2010 70 CALL [WFR @ $76.44 $2.59]

4/20/2007

(646)

$43,610.00

$10.90

$14.50

$25.40

–

$57,990.00

133.0%

$101,600.00

Selling 30 Apr $75s, now $3.10

ZETAQ

Jan 2009 85 CALL [WFR @ $76.44 $2.59]

2/15/2008

(282)

$25,610.00

$12.80

$-1.20

$11.60

–

$-2,410.00

-9.4%

$23,200.00

The 30 sold above are a 1/2 cover of the whole position.

WMGB

Jul 10 CALL [WM @ $11.42 $-0.03]

100

3/7/2008

(100)

$11,010.00

$1.10

$1.61

$2.71

$0.25

$16,090.00

146.1%

$27,100.00

This is kind of a gamble that paid off already but could go much higher (or die)

VWTAK

Jan 2009 55 CALL [WMT @ $54.66 $0.52]

3/20/2008

(282)

$16,010.00

$4.00

$0.65

$4.65

$0.20

$2,590.00

16.2%

$18,600.00

Went too high, selling 1/2 May $55s, now $1.48 and 1/2 May $52.50s, now $2.98. Will roll $52.50s up if it keeps going.

WFSAX

Jan 2010 24 CALL [XLF @ $25.62 $-0.16]

3/20/2008

(646)

$17,410.00

$5.80

$-0.95

$4.85

$-0.35

$-2,860.00

-16.4%

$14,550.00

Gamble like WM but slower mover, will DD and sell 1/2 Apr $26s, now .41, then 1/2 May $25s or $26s (depend on finish)

6 Calendar Call Spreads

“);

VRNAD

Jan 2009 20 CALL [C @ $23.71 $0.13]

3/20/2008

(282)

$23,010.00

$4.60

$1.05

$5.65

$0.05

$5,240.00

22.8%

$28,250.00

CDE

Apr 25 CALL [C @ $23.71 $0.13]

-50

4/2/2008

(9)

$-6,240.00

$1.25

$-0.82

$0.43

$0.00

$4,090.00

65.5%

$-2,150.00

Hopefully they expire worthless will move to 1/2 cover at $25, now $1.05

“);

VRNAC

Jan 2009 15 CALL [C @ $23.71 $0.13]

11/7/2007

(282)

$28,050.00

$7.01

$2.34

$9.35

$-0.15

$9,350.00

33.3%

$37,400.00

CDE

Apr 25 CALL [C @ $23.71 $0.13]

-40

4/2/2008

(9)

$-4,990.00

$1.25

$-0.82

$0.43

$0.00

$3,270.00

65.5%

$-1,720.00

Same as other Cs, made lots of money, can chance 1/2 covers although, that's a lot of naked financials!

“);

VFXAQ

Jan 2009 85 CALL [FDX @ $94.34 $1.23]

4/10/2008

(282)

$31,610.00

$15.80

$0.10

$15.90

–

$190.00

0.6%

$31,800.00

FDXDS

Apr 95 CALL [FDX @ $94.34 $1.23]

-20

4/10/2008

(9)

$-2,890.00

$1.45

$0.00

$1.45

$0.45

$-10.00

-0.3%

$-2,900.00

Probably roll to May $95s, now $3.35

“);

VSDAJ

Jan 2009 150 CALL [GS @ $170.55 $-3.59]

11/8/2007

(282)

$32,260.00

$32.25

$5.00

$37.25

$-3.00

$4,990.00

15.5%

$37,250.00

GPYDP

Apr 180 CALL [GS @ $170.55 $-3.59]

-10

4/3/2008

(9)

$-4,990.00

$5.00

$-3.83

$1.17

$-1.19

$3,820.00

76.6%

$-1,170.00

Taking out caller as GS can jump $10 in a day. Replacing with 1/2 $470s, now $4.75

“);

OOSAA

Jan 2009 5 CALL [PEIX @ $4.20 $-0.06]

1/23/2008

(282)

$5,690.00

$1.42

$-0.62

$0.80

$-0.25

$-2,490.00

-43.8%

$3,200.00

PFQDA

Apr 5 CALL [PEIX @ $4.20 $-0.06]

-40

3/17/2008

(9)

$-1,470.00

$0.37

$-0.32

$0.05

$-0.05

$1,270.00

86.4%

$-200.00

Not worth selling May calls ($5s are .20) so just hoping they don't go BK

“);

STXFD

Jun 20 CALL [STX @ $21.63 $0.56]

100

10/18/2007

(72)

$27,010.00

$2.70

$-0.40

$2.30

$0.25

$-4,010.00

-14.8%

$23,000.00

STXDX

Apr 22.5 CALL [STX @ $21.63 $0.56]

-100

4/4/2008

(9)

$-4,990.00

$0.50

$-0.20

$0.30

$0.15

$1,990.00

39.9%

$-3,000.00

Expecting them to break up after exp.

9 Custom Spreads

“);

VAXAI

Jan 2009 45 CALL [AXP @ $45.06 $-0.02]

9/4/2007

(282)

$50,400.00

$6.30

$0.00

$6.30

$-0.70

$0.00

0.0%

$50,400.00

AXPDW

Apr 47.5 CALL [AXP @ $45.06 $-0.02]

4/3/2008

(9)

$4,410.00

$1.10

$-0.90

$0.20

$-0.15

$-3,610.00

-81.9%

$800.00

After a nice set of sells in April, I can 1/2 cover in May, probably the $45s

“);

YBOAC

Jan 2010 20 CALL [BSC @ $10.20 $-0.21]

3/14/2008

(646)

$22,410.00

$11.20

$-10.68

$0.52

$-0.08

$-21,370.00

-95.4%

$1,040.00

BVDDV

Apr 12.5 CALL [BSC @ $10.20 $-0.21]

3/26/2008

(9)

$1,710.00

$0.85

$-0.79

$0.06

$-0.01

$-1,590.00

-93.0%

$120.00

It was risky selling these but I might do it again with tight stops (but that may not help)

“);

VSBAV

Jan 2009 12.5 CALL [BSX @ $13.27 $-0.19]

8/27/2007

(282)

$8,260.00

$1.65

$0.85

$2.50

$-0.15

$4,240.00

51.3%

$12,500.00

BSXDV

Apr 12.5 CALL [BSX @ $13.27 $-0.19]

-15

3/25/2008

(9)

$-1,370.00

$0.92

$-0.02

$0.90

$-0.10

$20.00

1.5%

$-1,350.00

I got suckered into taking out some callers on the way up! Lesson learned, selling 1/2 May $12.50s, now $1.23

“);

VSYAD

Jan 2009 20 CALL [CY @ $26.47 $-0.12]

2/14/2008

(282)

$44,650.00

$5.58

$3.12

$8.70

–

$24,950.00

55.9%

$69,600.00

CYDP

Apr 22 CALL [CY @ $26.47 $-0.12]

-20

3/25/2008

(9)

$-2,590.00

$1.30

$3.40

$4.70

$-0.41

$-6,810.00

-262.9%

$-9,400.00

On the other hand, I wish I'd taken these all out! Rolling to however many May $26s make it even

“);

VIBAC

Jan 2009 115 CALL [IBM @ $118.78 $2.01]

4/1/2008

(282)

$25,810.00

$12.90

$0.30

$13.20

$0.70

$590.00

2.3%

$26,400.00

IBMDC

Apr 115 CALL [IBM @ $118.78 $2.01]

-15

4/4/2008

(9)

$-5,840.00

$3.90

$1.10

$5.00

$1.40

$-1,660.00

-28.4%

$-7,500.00

Rolling to same number of May $120s, now $3.35

“);

OOXAL

Jan 2009 60 CALL [NYX @ $66.09 $-0.21]

3/10/2008

(282)

$18,370.00

$9.18

$4.17

$13.35

$-0.65

$8,330.00

45.3%

$26,700.00

NYXDM

Apr 65 CALL [NYX @ $66.09 $-0.21]

-15

4/4/2008

(9)

$-6,590.00

$4.40

$-2.08

$2.32

$-0.28

$3,110.00

47.2%

$-3,480.00

Rolling to same number of May $65s, now $4.50

“);

PYPIK

Sep 155 CALL [POT @ $178.10 $2.21]

3/17/2008

(163)

$95,220.00

$23.80

$14.30

$38.10

$2.00

$57,180.00

60.1%

$152,400.00

PYPDO

Apr 175 CALL [POT @ $178.10 $2.21]

4/4/2008

(9)

$13,010.00

$6.50

$0.00

$6.50

$0.70

$-10.00

-0.1%

$13,000.00

Rolling to 20 May $180s, now $12.55

“);

ZVKAT

Jan 2009 100 CALL [TM @ $95.41 $0.21]

3/3/2008

(282)

$36,610.00

$12.20

$-4.10

$8.10

$-0.50

$-12,310.00

-33.6%

$24,300.00

TMDA

Apr 105 CALL [TM @ $95.41 $0.21]

-20

4/3/2008

(9)

$-2,190.00

$1.10

$-0.90

$0.20

$-0.05

$1,790.00

81.7%

$-400.00

Great as a new entry. Rolling to 20 Apr $95s, now $2.08, then 20 May $95s, now $4.35

“);

VXTAF

Jan 2009 30 CALL [TXN @ $30.07 $0.55]

12/29/2006

(282)

$25,370.00

$3.17

$0.13

$3.30

$0.35

$1,030.00

4.1%

$26,400.00

TXNDF

Apr 30 CALL [TXN @ $30.07 $0.55]

-40

4/3/2008

(9)

$-3,470.00

$0.87

$-0.28

$0.59

$0.21

$1,110.00

32.0%

$-2,360.00

Rolling to 40 May $30s unless they break over $30, then stopping out and holding naked for a bit.

Market Prices	Index	Price	Change
Dow Jones Industrial Average Index	$DJX	$125.82	$0.55
Nasdaq 100 Index	$NDX	$1,852.97	$26.78
S&P 500 Index	$SPX	$1,360.55	$6.06

Net Cost:	$1,116,170.00
Total Income:	$47,620.00

Market Value:	$1,420,650.00
Cash on Hand:	$616,375.00
Total Value:	$2,037,025.00
Virtual Portfolio Return:	103.7%

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