Posted by: ctraderd | June 2, 2013

Watchlist- Week of 6/3/13 $CPSS $IWM

Last week, the Dow Jones Industrial Average fell –191.60 for –1.25%, the S&P 500 fell –11.86 for –.72%, and QQQ shares closed Friday’s trading session at $73.25 gaining just +.15 for +.21% on the day. The DJIA and S&P 500 were actually both sideways on the week on Friday at around 2:30 EST. Then, out of no where, the market decided to dive off a cliff as millions of shares of stocks were sold and the indexes absolutely tanked. In the aftermath the Dow had tanked around 200 points in the sell off. This leads me to wonder whether this selling action was just people taking profits for the month of May, or whether it was the start of a major turn in the market’s trend. The last time we saw action like this was on the Friday of 1987, before the Great Crash of 1987. I honestly have no idea what is going to happen on Monday, but another crash might happen.

Last week I closed two trades and opened another one. All of these trades were in IWM. In the first trade, I closed out my position of 5 Jun13 96 Calls calls at $3.46 from $2.74 for a $329.73 profit. Then I did another small swing trade in which I bought 10 Jun13 100 Calls at $1.88 and exited them the next day at $1.94 for a small $29.28 profit. After that, I opened up a position of long 10 Jun13 101 Calls at $.73 and am still holding them currently. You can see all these trades on my page. Last week I made a realized profit of $359.01 and closed out the month of May with a $1,159.87 profit. Before making any decisions based on this article, read my disclaimer and do your own research!! 

1.) Consumer Portfolio Services, Inc. (CPSS)

Last week, CPSS closed out the week at $7.77 losing –.27 for –3.36% on the week. However, on Thursday and Friday, CPSS had a great run going. The stock climbed around +.55 in the two days and made back nearly 66% of the stock’s losses on the week. The surge was caused by an equal weight initiation by Stephen’s with a price target of $9 per share. I am still long 500 shares from $9.236 average and am down –$733 unrealized for –15.8%. I do have a 25% stop/loss at $6.93 which I will let sell if touched. My price target remains at least $10+ but ideally $13+. 

2.) iShares Russell 2000 Index (IWM)

Last week, IWM held on to its gains despite the big late-afternoon sell off in the whole market on Friday, gaining +.61 on the week for +.63%. IWM is the equivalent of SPY and DIA, but IWM is parallel to the Russell 2000 Index. I am currently holding 10 Jun13 96 Puts on IWM and have been hedging myself through the form of Calls on the stock throughout the week. I have bought and sold two Call hedges so far (mentioned above), and am holding more Calls as a hedge to my Puts currently. I am hedged either way for Monday, if the market falls, or if it bounces. Playing this Index has been very profitable for me so far and I will continue to play this one with options as my main trading vehicle.


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