Friday's shopping trip

Friday's market did not have near the volatility of the earlier in the week and was positive on the day.   That was not exactly the conditions I had in mind when I created the shopping list document in the following article.

fridays shopping list

However, some specific conditions still presented themselves to enter two of the  three potential Etf plays. described in more detail in the article.  Here are the trades made on Friday

• Materials ETF XLB - risk reversal .  XLB never really pulled back on Friday and conditions never seemed right to enter. So nothing was done, but we will continue to monitor for possible entry next week.
• Japanese ETF EXJ - put selling.  Somehow got an order processed to sell the Aug $9 puts for $.08.  The etf closed around $9.80. So if the Japanese stocks fall 8+% next week.  I own it.  If it does not fall 8% we make about .9% in a little more than a week.  (or about the income from a 5 year treasury for a year).  By the end of the day, the option was barely trading, so this opportunity is no longer available.  
• Utility ETF XLU - coverd calls.  The xlu did pull back a little and this trade was entered.  Stock was purchased at $31.73 and Jan $32 calls sold for $1.24. (about 4%). That is a net cost of $30.49.  If this etf trades flat for the rest of the year we can make the 4% option premium, plus about 2% in dividends.  The portfolio does not start loosing money on this trade until under $30.

We will track these trades and hte ones from S&P downgrade Monday as a group