Today I BTC 2 TOL Jan09 30 Puts and STO 2 TOL Jan10 30 Puts for a net deposit of $401.00 in my taxable account.  My basis for these TOL shares would now be 23.88 if put to me today.

With my potential basis at 23.88 and TOL currently trading at 22.98 as I write this I would be in pretty good shape is somebody actually put TOL to me now.  TOL doesn’t pay a dividend but as long as this margin account doesn’t require me to sell the stock right away I would probably hold on to TOL and sell Covered Calls on it to generate additional revenue for the account.  For example, I could sell the TOL Dec08 25 Call for 1.80 right now.  That would net me about another $350 into the account.

Well, I have finally documented all of my trades, including those performed on my behalf by the E*Trade margin department.  October has, by far, been my worst month in the stock market…ever.  My only solace is that as I read other blogs and watch CNBC I know that I am not alone.

On the bright side, there is more commentary that we have finally hit the bottom and the the market seems to agree this past week.  For the first time in over a month, my taxable account actually shows cash available for withdrawal and margin purchasing power, not that I plan to do either for awhile.  I may use the purchasing power to roll out some Covered Calls I sold though.  That is if the market doesn’t tank again next week.

Although I’d like to at these levels, I don’t plan to sell any new Puts until after Nov08 options expire.  I just don’t have enough cash on the sideline and I do not want to do any more on margin in my taxable account until I am well out of the woods there.

If I was better at buying Puts on down trending companies I should have made a lot of money these past few months.  I’ve done a little of that in the past with modest success but I just don’t think too well in reverse.  Or, if I was approved to sell naked Calls but I don’t know if I want to go there.  I know these are both opportunities to deal with down markets and I should do a little more reading and learn to be more nimble.

On 10/28/08 the E*Trade margin department BTC 2 Dec08 25 Puts and 6 Jan10 12.50 Puts to help satisfy an imbalance in my taxable account.  I am actually glad to get these off my back.  I keep thinking that GM is too big to allow to fail and that the Feds will do something to prevent it, if for no other reason to preserve the millions of jobs that would be lost.  However, in the meantime, I don’t need to own any more GM, especially at those strike prices.