January Action

Well this month's options are a done deal. My first systematic go at selling credit spreads worked okay. The bull put spreads took off and would have fetched a lot more using bull call spreads. The bear call spread on EEM cut it very close to the short strike prices ($44.78 close vs $45 strike), but everything expired out-of-the-money fortunately.

Bull put spreads: SLV +12.6% and UNG +7.7%. Bear call spreads: EEM +18.3% and EWZ +8.8%. These were held 30 days or less.

Observations? I made some trades where I sold too little premium and got a weak return. I've done better with my Feb spreads. I was a little too quick to sell some bear call spreads for ETFs that were trending up and taking up residence in the RSI Overbought zone. Risk-reward is a delicate balance there.

I do like the fact that I can trade these with great confidence in a flat or declining market where my usual long trades don't perform well. I also think that reviewing the ETF charts gives me a better perspective on the market.

Bull call spreads for JAZZ and KOG closed as well, +65.8% (on the JAZZ long call cost) and +135.9% (on the KOG spread cost).

NSR hit its trailing stop, -0.14%.

I bought puts and a bear call (credit) spread for XRT. The spread is on Options House where there commissions are considerably less. But I do like the way optionsXpress presents your spreads.