Pullback Profits

Since we finished right at 930 resistance Friday I held my puts, which ended up being smart as the market pulled back nicely yesterday and let me profit as my puts and short call positions outpaced my long calls. I was actually hoping for more short term downside and liked that we were trading lower overnight but it is hard to keep this market down, China news is sending futures a bit higher today, financials aren't participating at the moment which is good for my positions and could help keep a lid on any rally attempt today if it continues. I partially feel like the move friday was a fake out and the old me likely would have been shaken out of position which seems to happen around expiration week. We seem to get moves that test your resolve, prices will move just beyond support or resistance making you get out or in before they reverse course and you get screwed. I am hoping to avoid that this week. As of right now all my short option positions will expire worthless and I'd like to keep it easy and clear cut.

I still have yet to determine a good way to profit from expiration week. Although I assume the best way is to sell premium because market makers want options to expire worthless and overall they can't keep the market pinned but in the short run it seems to be possible to manipulate it. I am no conspiracy theorist, I am just trying to exploit realities for gain if possible. I may look into the which options have the most open interest on stocks and see where they finish friday and if there is a correlation. Options expiration is almost like a mini earnings event in that we see volatility generally contract(again benefiting sellers).

Oil is higher today which I hope helps my CHK position, however it is near 60 a barrel which is likely going to produce some resistance in the short term for energy stocks. I doubt the overall market will make any dramatic moves in either direction until after options expiration. I could be wrong but that is how I see things going and hope that they do but am willing to react if necessary.

Total Return for 2009: 153%