To complete my options roll (from Tuesday), I sold my 6 ITB put options today at $6.10 each. Keeping track of all housing trades (starting February 2009), I have a gain of $928. Currently, I still own 9 put contracts (green highlights), worth $5,720. In simpler terms, I have a position currently worth $5.7k betting that the stock prices of homebuilder companies will fall.
For the thesis behind this trade, please read Housing, Economy, Banks–A Three Legged Stool With Three Broken Legs.
Also, an update on the Freddie Mac (FMCC) put options… After speaking with my broker today, I realized that my best play may be to convert the options into a short position. The stock has recently been trading between thirty to forty cents per share. Frankly, I can’t see how anyone on the other side of the trade would be investing; it would be more like gambling. In my opinion, the equity is worthless.
