I wasn’t planning on doing much today but I had a few new ideas last night while sitting in my house during the rain. While pondering my portfolio, I think I now have figured out how my broker’s margin reserve works for options and how to minimize my dead cash. I should be able to get a better return on my cash that they are holding since I believe they will “hold” other things besides cash. I think I can buy some Platinum (PPLT) with my margin credit, if it doesn’t work then I am going to buy more Australian dollars since I know that does free up the “margin reserves”.
Second idea, earlier this week I wanted to do something with the Transocean (RIG) lasso (long the Jan ’13 $55/$70 call; short the $40 Jan ’13 put) that I own. RIG has dropped a lot since I put it on but it seems to have stabilized. A few days ago I was thinking I’ll just buy back the Jan 13 $70 call but last night I came up with better idea. I could wait for RIG to come back to $55 or I can increase the odds of it paying off by rolling my strikes down. So the plan is now selling the $55 call and buying a $45 call, this should cost me about $2.50/share to do. Initially when I looked at it was more money than I wanted to spend but if I also buy back my $70 call and then sell the $60 strike this nets ~$.75/share. It still sucks to spend $1.75/share on this but I have no money in the game and it’s way more likely that I will make $15/share if I spend the $1.75/share. Even so, that still leave me with a potential $13.25/share and if RIG makes it back to $46.75 buy the end of this year I break even. I like the odds better of spending $1.75 to start making money at $45 rather than hopping for $55 by Jan ’13.
It looks like it will be a good day since “risk on” seems to be strong in the pre-market. Europe up a lot today and it should carry over to here to our markets.
After the open update: I am amazed with Bank of America and the options I bought this past Monday. As of the open, it now is over $1.00 giving me a 200% gain in less than a week! Oh why didn’t I do more… Traders dilemma. 
I also closed my “Margin Credit” today by buying more Australian dollars and I also bought some Platinum (PPLT), gold is the poor man’s metal!
My “Cash” position is now ~15% down from ~20% at last week. This change is due to portfolio growing and not cash being used.
traderwasteland
mattmarsh
miltonfriedman
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