Trade Update MS: Closing the Balance of Dec 16/15 Put Spread

by Dan December 16, 2011 11:00 am • Commentary

3rd Trade Update Dec 16th, 2011 at 11am: Similar to Citi, holding the MS put spread, which is worth more than triple what I paid for it last week is a bit of market call and again I have little conviction on the markets direction between now and the close…..I will close the second half of this position at .68 for a .48 gain.

So to recap, I sold half at .45, a qtr at .65 and now the the last qtr for .68, approx .56 average on all and a .36 gain on the full position.


2nd Trade Update Dec 14th, 2011 at 9:55am: With MS down almost 1% with the stock around $15.00 I am going to sell half of my existing position at .65 (paid.20 with this spread, sold half on Monday at .45).   So I leave 1/4 of my original position.

Trade Update Dec 12th, 2011 @ 9.54am: With MS down about 10% since putting on this Dec Put Spread I can now sell this spread for .45, more than double what I paid.  You guys know the drill I will sell half and let the other half ride into this Friday’s expiration.  With the way the markets are moving and this name in particular I think it makes sense to take some profits when you have them.   In this is instance, no matter what happens from now till Friday’s close I can’t lose on this trade.


Original Post Dec 8th, 2011: MS-Looking to Take Advantage of a Tempered Opening in U.S. Banks

As I stated in the “Morning Word”, DB is down about 2.00 in the pre-market on investors disappointment with ECB chief Draghi’s failure to instill confidence that the central bank will continue to buy European Sovereign debt.  MS has rallied over 30% in the last 2 weeks, I want to fade this move into next week’s expiration. 

BOUGHT:  MS ($17.33) Dec17th 16/15 Put Spread for up to .20

-Bought 1 Dec17th 16 Put for .38

-Sold 1 Dec17th 15 Put at .18

 Break-Even On Dec Expiration:

Profits btwn 15.80 and 15 make up to .80, max gain of .80 at 15.00 or lower

Loses btwn 15.80 and 16 lose up to .20 and max loss of .20 above 16