from the desk of Dr. Terry F Allen

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Update on eBay Trades

Update on eBay Trades

With the stock up nicely today, I am taking off the put calendar spread at the 50 strike:

BTC 20 EBAY Jan-13 50 puts (EBAY1301029P50) for $.02 (no commission)

STC 20 EBAY Feb-13 50 puts (EBAY130216P50) for $.28

I plan to wait until near the end of the day tomorrow to take off the remaining spreads.

At this point, I could close out all the positions and make a gain of about 25% after commissions.  This was a disappointment.  The problem was that I estimated that the IV of the February options would fall from 35 to 33 (as that is what January options carried with four weeks of remaining life.  IV fell all the way to 27 and reduced the gain that I originally expected.

Happy trading.

Terry

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I have been trading the equity markets with many different strategies for over 40 years. Terry Allen's strategies have been the most consistent money makers for me. I used them during the 2008 melt-down, to earn over 50% annualized return, while all my neighbors were crying about their losses.

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