Mechanical Investing for October 2007 (Update)

Yes, the market ha been topsy-turvy (isn’t it always?), but some of the 6/3 options from a couple of weeks back have done well. When they hit about 400% return, these options begin to move like the underlying stock, so it’s time to sell the option and but something further out of the market. One of them did that, so I made the following changes today –

6/3 Options:

Ticker Bought Sold Months Return  
AXVDJ $27.30 $97.90 .75 +358% ISRG Apr 2008 250 Calls. Sold early, replaced by CUBDJ.
CUBDJ $4.90 $N/A 0 N/A% CUB 50’s Apr 2008 Calls. Sell in early January.

Normally, I would have replaced ISRG calls with new ISRG calls, but gadzooks the 350 April 2008 calls are expensive, more than I want to spend on an option, so I elected to replace it with the cheaper CUB calls.

What’s the overall performance here mid-month? Nothing to complain about –

  • Last 4 weeks: 3.0%
  • Last 3 months: 5.7%
  • Last 12 months: +8.3%
  • Year to date: +8.2% (Dow is +9.6% ytd from 12,463)