Another tough week in our options portfolio as the market malaise continues to drag down our long call positions. We are down YTD in this portfolio, but also know how quickly returns can turn. We fully expect this portfolio to outperform the market by the end of the year. We have some call options in financial stocks including Bank of America and EZCorp and expect both to take off now that clarity over financial reform has improved. Most of our call options expire in September or later, so hopefully that will be enough time for the overall market to recover and restart its advance. We did purchase a call spread position against AutoZone last week having a January expiration. We need the stock price to rise just 3% by January to breakeven, but could make big gains of up to 100% if the stock price rises just 7%. We like the risk return tradeoff on this one and the January expiration gives us plenty of time to profit. The broad market volatility spiked again last week and if premiums continue to rise, we make take a short position on options that are close to expiration.
Portfolio Details Available Online At:
http://www.marketbeatingstocks.com
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