Jun 30 Options Writing Trades Update

The Nikkei average shed 62.98 points to 13,481.38, falling for a eighth straight day, the longest losing streak since last November. Oil prices surged above $143 a barrel for the first time ever Monday & a stronger yen did not help the situation.

The Week Ahead

US Market participants get next Friday off in observance of Independence Day. The shortened week is packed with economic reports, which will keep traders busy leading up to the extended weekend.

Last Friday, Japan report annual consumer inflation accelerated more than expected in May, hitting a new decade-high on surging energy and food prices. In addition, renewed concerns over the global credit crisis added to the gloom. The Nikkei is expected to face continued pressure this week.

Japan inflation at 10-year high

The CPI data further highlights the policy dilemma facing Bank of Japan: rising inflation coupled with a slowing economy. Economists are forecasting virtually zero growth or even a contraction in the world's second largest economy in the April-June quarter and over the months ahead.

Jun 27 Options Writing Trades Update

Dow plunge to 21-month low & surge in oil price rattles Asia investors. Japan's Nikkei share average was on course for the worst first-half performance since 1995. In the current strangle strategy that I employ (where I sell to both sides of the market i.e calls & puts), the calls premiums are "decaying" nicely. It's the puts that are moving against the portfolio. But for anyone who has ever "rode out" a naked option sale moving against him, the ride can get bumpy at times. Regardless of ones ultimate conviction, and aside from the fact the option is nowhere near going in the money, a continued sharp move in the underlying towards the strike can make one quite uncomfortable, both margin-wise and from a psychological level as one watches the option value rise. Keeping a close tab on the market is in order this period.

Jun 26 Options Writing Trades Update

The Nikkei stock average edged down 0.1 percent on Thursday, extending its longest losing streak this year to a sixth session. Japanese consumer prices, jobs and industrial output data are due out on Friday morning & will be closely watched.

Jun 25 Options Writing Trades Update

The Nikkei slips for 5th straight days but is still holding out pretty well I must say with support at around the 13900-14000 levels. I am looking to add more Sep calls to the positions at the next opportunity to complete the Sep income set up.

Jun 23 Options Writing Trades Update

Asian stocks tumbled Monday. The Nikkei lost 84 pts & closed at 13857 but was off its low of 13667 or -275 pts from previous close. According to some analysts, Japan's business outlook remains steady with growth in Asia.... its not good in the US but its bottoming out plus the yen is weak. But of course, sudden oil spikes & poor exports performance could change all these. Nonetheless, volatility is expected in today's markets.

The week ahead

The focal point next week will be the FOMC policy announcement on Wednesday. The market expects the fed funds rate to remain unchanged at 2.00%, but uncertainty remains & the wordings of the policy directive will be closely watched. In addition, market players will also be keeping a close eye on economic data. The consumer confidence, durable orders, new home sales, existing home sales, and personal income and spending reports just to name a few. With Friday's steep losses on Wall Street, the Nikkei will face some head winds into next week. This might mean that the N225 Aug Puts will start to look attractive again & can be considered for adding into the positions to complete the Aug's income set up. Should the index at any point bucks the trend, it will be present a good opportunity to take on additional N225 Sep Calls.

Jun 20 Options Writing Trades Update

The Nikkei decline a further 188 pts Friday. The Tokyo market's fall came despite overnight gains on Wall Street and a sharp rebound by Chinese stocks. According to some market analyst, foreign investors who bought Japanese stocks in April and May as they raised their investment stance on Japanese stocks to neutral from underweight, are now taking a breather after buying to that level.

Jun 19 Options Writing Trades Update

The Nikkei average lost steam Thursday & returned 322 pts or 2.2% back to the market. This following Wall Street's dismal performance in the last 3 trading session & a firmer yen. I wrote additional N225 Sep 10000 Puts for 35 pts.