On November 12, 2008, I sold one put contract to open on Energy Conversion Devices (ENER), which was down significantly this month.
In hindsight, I bought the financial stocks way too early. I've learned my lesson. I will not purchase any more financial company stocks, until there is a more clear turnaround in the financial crisis of 2008. This week financials demonstrated that the industry is toxic.
A new bottom occurred, due mainly to the financial stocks. The overall portfolio declined again last week and is down 45.30%, surpassing the low of -29.78% from last week. Monsanto is also now down 24.23%, after being profitable or break even for several weeks.
|Stock [purchase date]||Shares||Purchase Price|
Price on 11/21/08
|Bank of America(BAC) [10/3/08]||100|
|J.P. Morgan (JPM) [10/3/08]||100|
|Wells Fargo (WFC) [10/3/08]||50|
|Monsanto (MON) [10/3/08]||50|
The Energy Conversion put contract expired worthless this week, enable me to pocket a $69 premium. I also sold another Monsanto put contract, the December 40, for $1.19.
|Option [short date]||Shares||Short Price|
Price on 11/21/08
|Monsanto Nov 60 put (MONWL) [10/3/08]||100|
closed on 10/29/08 for $0.91
|Energy Conversion Nov 20 put (EQIWD) [11/12/08]||100|
expired 11/21/08 at $0
|Monsanto Dec 40 put (MONXI) [11/20/08]||100|
In spite of the Geithner rally on Friday, the market and these stocks are still declining. I am considering selling a new put contract on Energy Conversion Devices, since the November contract expired. For now, I will hold the financial stocks, but make no additional purchases. If President-elect's announcement on Monday cause financials rally significantly next week, I may sell some of the financial stocks.
Disclosure: At time of publication, I own Bank of America, J.P. Morgan, Wells Fargo and Monsanto shares. I also am short one put contract on Monsanto.
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