Trade alert: Sold 200 $FIG @ 4.41

I am out of the entire $FIG position.

Sold 200 $FIG @ 4.41 booking little profit.

I am taking this off as I had initialized this position in a wrong way. I bot the first 100 at around $5 level when the stock had already run up huge.

Immediately, I was in a hole and started dollar cost averaging. Luckily this broke above the DCA and was I cannot play earnings risk with this volatile stock.

Fortress Investment Group earnings $FIG

$FIG: Fortress Investment group is reporting 2nd Quarter earnings on 8/5/2009 Before market open.

As usual, I am expecting a ramp up all the way to earnings. I am waiting for it to go up to $5 level all the way till 4th Aug. Well this might not happen but lets see…

Currently I have 200 shares of $FIG at a price average of $4.11 which is at a net loss of $33 (4%) see line in orange below.

I am expecting a ramp up to $5 in 2-3 days and wanted to list out a few scenarios on how to play this

1. Simple and sweet: sell into earnings ramp up all 200 and close position for a small profit. The benefit is that I am out of a risky position in my portfolio and can move money to ETFs
2. Sell half, let other half ride: The problem with this is becuase of the first in first out accounting system (FIFO) if I sell 100 shares of FIG the lot purchased on 5/14/2009 will be sold. The cost basis for this is $4.98. Even if I manage to sell this around $5, I will be losing money on commissions… hmmmm maybe I should do a post on how to lose money on commissions and bid ask spreads…
3. Sell half, and sell 1 covered call on remaining 100: This is something to think about….maybe I can reduce the holding position and generate money by selling covered call
4. Hold all and sell 2 covered calls: This sounds good too but the risk in this is that I will still be holding 200 shares of a highly volatile stock

I might choose between 3 and 4. Will update this post in a couple of days. Let $FIG play out its game and I am ready with mine.

Watchlist Aug 01 2009

Looking at some charts over the weekend and doing some TA, I have come up with the following stocks I will be following closely next week. Charts pulled off www.finviz.com (great site)

$FSLR: This was sold off like crazy after the earnings came out, still not completing the pattern and hitting the support. I will wait until it bounces off support trend line. Target @ 140

$WFR: Still on my watchlist, waiting for the pattern to selloff to support trendline. Target @ 16

$POT: This looks interesting, will see which way this goes, I would like to see some sell off along with the market so I can establish some longs

$DBA: Seems to be holding TL support. so far so good, I am thinking of adding more here

$FIG: This is going higher in anticipation of the earnings release. We have 200 shares @ 4.11, game plan is sell 100 just before earnings or sell covered calls @ 5 and @7.5 to collect some commissions just before earnings. I will post the trades here on the blog