Thursday, March 31, 2011

Today's New Positions

I established 6 new CSP positions today. AVP & LOW declined today providing an opportunity to sell CSP's at my target buy price, which is about 30% below my fair value estimate.

Since I was holding over 78% in cash, I decided to sell some deep OTM CSP's on TLT for May expiration. TLT hasn't closed below $88 in several years so I sold 4 different strikes at $85, $86, $87, & $88. With the market overvalued, by the metrics I follow, if there's a correction, TLT should rise as investors flee to the safety of US Treasuries. If that occurs, these puts should expire in May, and free up the cash to pick up any new opportunities that arise.

As a result of today's trades, I'm currently 54% invested and 46% in cash, with 14 open positions, 4 CC positions and 10 CSP positions.