August Option Investing – July Positions Covered

Caution Sign

Caution! High Volatility Ahead (Source:

I get away from my computer for a week and the markets crash – I feel like Barry Ritholtz!

Throughout July, the US markets showed signs of weakness. With price/volume action described as “choppy” at best, I’ve been expecting some sort of correction for a few months. The problem is always timing.

Before I headed out, I placed buy limit orders on all my options for 0.10 or less. My logic was that if a market fall occurred while I was away and the orders executed, I would book over 90% of the option premiums and could then sell my underlying shares if needed.

When markets are this volatile, you can make a lot of money or lose your shirt. In the past, I have bought and sold options using short term technical analysis during times of high volatility. I think it was more luck than skill.

As of August 5th, DRN and FAS options were purchased, with EDC coming in on the 8th.

Bought August 50.00 calls @ 0.10 for DRN
Bought August 35.58 calls @ 0.10 for EDC
Bought August 25.00 calls @ 0.10 for FAS


About T. Knight
Blogging about my journey to financial independence via investing for cashflow.

One Response to August Option Investing – July Positions Covered

  1. Pingback: Cashflow Report – Paper Income during August 2011 « Investing for Cashflow

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: