Summary – Tuesday, 2008.III.25.

A nice consolidation day for the bulls.  I don’t have much to offer in terms of analysis, so don’t forget to read The Fly’s comments, as well as Woodshedder’s technical take.

I’m slowly putting more my account balance to work…so in addition to the already discussed trade in [[SEED]], I opened a couple more positions:

• Long calls in [[EOG]] – it’s holding $112-113 range support, which also completes the consolidation from its recent breakout.
• Opened a strangle in [[FINL]]-(h/t to RC).
  • Wasn’t going to touch it until I saw comparatively very high open interest numbers for May calls.  With the stock trading right around $5, took a dip in May 5.00 Calls, purchasing extremely cheap insurance at the same time with May 2.50 Puts (thus creating the strangle).
  • This is somewhat of a gamble, so the whole position is assumed as the standard 2% risk.

DP Sells (at market-close):

• Started unwinding [[CSUN]] strangle & [[SEED]] straddle.
  • Both went on a tear during the day (pre-earnings hope?), so I closed out enough calls to guarantee, at worst, a break-even in the positions.
  • Whatever happens from now on is pure profit, with zero risk.
  • Both companies report earnings tomorrow pre-market.

Once these trades are fully closed out, I will post an ‘anatomy of a trade‘-type article to walk through a straddle/strangle from start-to-finish, with a concrete example.