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Energy Sector SPDR (XLE) Profits
March 19, 2009"Buy to close" the XLE March 40 Puts (JSKON) for 25 cents or less
Dear Fellow Options Traders,
The Fed gave us a gift yesterday. Let's take it. Buy injecting lots of new liquidity into our economy, the Fed drove the dollar lower and the price of oil up to more than $50 per barrel.
During the past 18 months, the half-life of Fed action has been short. While we have an 80% winner in our short XLE March 40 Puts (JSKON) and about a week-and-a-half until the March 31 expiration for this option, let's take the money and look for the next trade.
"Buy to close" the XLE March 40 Puts (JSKON) for 25 cents or less.
Though we originally recommended selling the XLE March 40 Puts with the ticker symbol JSKON, if you sold to open the standard XLE March 40 Puts with the ticker symbol XLEON, we recommend that you leave those open and do not buy to cover, as there is very little time risk associated with them.
Nick Atkeson and Andrew Houghton
