Today I BTO 1 ACI Dec09 12.50 Put in an IRA account at 2.60.  I then placed a GTC STC order for the same ACI Put at 3.30.  I’m looking for a relatively quick turn around on this one.  If this works out I will net about $52.52 for a 19.54% (not annualized) return.

I don’t normally buy Puts because I don’t like the declining time value and I am just more of an optimist. However, I have finally decided that with the market continuing to go down I should take advantage of it.  I didn’t need to look any further than my own portfolio to identify candidates.  I had lots of choices but I picked ACI today.

The story is actually a little funnier than I depict.  I first BTO 1 ACI Dec09 12.50 Put at 2.55 and placed the GTC STC order at 2.00.  One doesn’t need to be a financial wizard to realize how poor that trade was.  Actually, I made the trade early in the morning (about 6:45 am – I live in California).  I had meant to STC at 3.00 but just made a typo and since it was early I didn’t notice the error.  Luckily, the STC was executed at 2.50 and the error only cost me 22.49.  If I had entered 3.00 as I had intended I would probably have been executed today as the end of day bid was 3.00 so it may turn out that it will cost me more.