White Christmas Portfolio Wrap-Up

December 24, 2011

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Merry Christamas!

I know it's tacky to give cash but, as we closed our original, virtual $25,000 Portfolio early on October 20th and we were miles ahead of our $100,000 goal, we decided to do this bonus portfolio starting with a fresh virtual $15,000 set aside out of our $130,000 – risking 1/2 of the excess profits in an attempt to make 60% more ($10,000) in two months.

We started that Monday, the 24th of October with our GNW spread (which I also discussed on TV that day) and that Friday we put up the official post where, I will remind you, our stated goal was to make a little bonus money for the holidays AND to share some of that money with a worthy cause. I want to thank everyone who chose to donate to the NYC Food Bank, we got some really spectacular donations from some of you and I really appreciate it and I hope you have all gotten into the holiday spirit and helped to support those in need this season – it's much appreciated and I thank you.

Just as importantly, I very much hope you were able to learn something following this portfolio. We never put much capital at risk, we took quick profits off the table and we worked our way out of most of our losses through rolling and adjusting – letting the trading range do most of the hard work. Most importantly, we had BALANCE – we selected trades in both directions – enjoying the wild ride from the up and down markets.

That strategy, in fact, worked very well!

As of Friday and since our last update on the 16th, when we had $41,465 of realized gains, we closed the following positions:

5 SCO Dec $37 puts sold for net $1.90, expired worthless – up $1,900
5 FAS Dec $40 puts sold for $2.40, expired worthless – up $1,200
10 TNA Dec $41 calls at net $1.50, out at $1.50 – even
10 FAS Dec $61 calls sold at net $0 (spread), expired worthless – even
10 TLT 12/23 $121 calls sold for net .74 ($740), expired worthless – up $740
10 GNW Dec $6 puts sold for .85, expired worthless – up $850
10 QQQ 12/16 $56 puts at .57, out at $1.05 – up $480
10 TNA Dec $40/41 bull call spreads at .40 ($400), out a .95 – up $550
20 QQQ 12/16 $55 puts at .22, out at .22 – even
5 JPM Dec $32 puts sold for .90, out at .15 – up $375
10 TLT 12/23 $123 puts at net $2.87, out at $3.60 – up $730
10 FAS Jan $67 calls at net $2, out at $2.80 – up $800
10 FAS Jan 72 call sold at net $0, out at $1 – down $1,000
10 GNW Jan $5/6 bull call spreads at net .49, out at .70 – up $210
10 FCX Feb $33 puts sold for $1.25, out at $1.25 – even

Up a very jolly $6,835 in week puts us miles over goal at $48,300, up a whopping 222% in 60 days! That's certainly enough to keep us ahead of inflation and triple our goal so Merry Christmas too all and I called it a good night (officially) for this portfolio on Wednesday but we're all gamblers at heart so we did take a few bearish fliers into next week – just for fun:

Our remaining open positions are:

20 DIA 12/31 $120 puts at net .85 ($1,700)
20 USO 12/30 $38 puts at .48 ($960)
5 VXX Jan $32/35 bull call spreads at $1.30 ($1,300)
5 VXX 12/30 $34 puts sold at $1.12 (-$1,120)

Our goal is to not blow net $45,000 and we're only risking $2,840 so, barring some huge bullish run that has us owning VXX short at $34 when it's much lower – our $45,000 should be safe and maybe we get lucky and pull $50K – won't that be fun?

We'll be starting a new virtual $25,000 Portfolio after the holidays and we'll certainly follow the same strategy under the "if it ain't broke, don't fix it" rule. Congratulations to all who played and Please don’t forget, if following this bonus portfolio has been good to you this holiday season – please take a moment to do something good for someone else:

I know you may think $35 is not much money (we pay more in trading fees on single transactions) but, for some people – just having a hot meal makes for a Christmas Dinner. I won't bore you with anecdotes from the Food Bank nor will I deluge you with statistics but the valet parkers at my mall charge $10 so you don't have to walk 100 yards from the parking lot and that same $10 buys a turkey at your local soup kitchen with which they can help feed a dozen people who are down on their luck a lovely meal.