The price of oil is still falling like a stone, but my heart is NOT made of stone. I have started dabbling in oily and oil correlated positions. The price of oil may very well have a few more percent of downside to go, but even the Saudis said they will start to panic at $40 per barrel.
Here's my trading brick of the day:
1st up: USO - United States Oil fund. It's an ETF that's pegged to the price of oil. I purchased 100 shares and sold a covered call to lower my cost basis.
Average price: $17.60 (including commissions). Hopefully oil will stabilize soon and this will bounce up a bit. Not before my calls expire worthless though!
Currently I'm long 200 shares of USO with a covered call with a $21 strike and another (opened today) with a $18 strike. My average cost on USO is $18.80. (Not yet adjusted for call premium)
2nd up: SNDK - Sandisk. The company that makes memory cards and solid-state hard-drives for computers.
I've traded this on and off over the years and today they revised their quarterly guidance DOWN by 4% but the stock plunged 14%. That seems like just "a bit" of an over-reaction to me, so I opened 2 positions on 2 different months. Very juicy premium because of the bad news.
3rd: Disney - Closed a successful position.
74% Rate of return
14% return on capital
Position open 70 days.
4th: CPG - Cresent point energy
This is a position I recently entered sadly before the oil price implosion. My average price on the stock is $35.50 so I sold 2 lousy covered calls for $38 each. I'm chipping away at my cost basis and the dividends haven't been cut (yet) and that pays another $46 monthly on my 200 shares.
So I'm still grinding out gains, one day at a time.
Stay HUNGRY my friends!