Thursday, May 9, 2013

Sell Mortimer, Sell!!

Today, with a loud sigh and heavy heart, I sold my 20 SHLD Jun 2014 65.42 contracts at $4.45, for total proceeds of $8,881 (basically at breakeven).

Now, I imagine you're all thinking the same thing, which is "WTF mevsemt?!  Sears, isn't that your baby?"  So here's the thing, although I'm still very optimistic about SHLD's future, I also viewed these options as the single most risky part of my portfolio.  For one, they expired in roughly a year.  Additionally, they were still pretty far OTM.  So, regardless of what I think about Sears, with any kind of broad market pullback or economic downturn, the value of these options could quickly evaporate.

Furthermore, with the market hitting new highs on pretty much a daily basis, it seems like just about everyone is reaching for return.  Personally, I think it might be a good time to be fearful...

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