On Dec 2, I STC 1 ACI Dec08 12.50 Put for a net loss of $192.49 in an IRA account.

I had originally purchased this Put back on 11/20/08 with the thought that since the coal stocks in general and ACI, in particular, were moving down I should try to make some money on that move.  It appears that I was too late to take advantage of the weakness.  This is why I generally don’t try to buy Puts.  I just don’t seem to have the feel for it.  I have made some quick profits on occasion in the past but not often enough to think I can do it regularly.

I might also comment here that once again I am a little late in reporting my trades.  Life and family just seems to take precedent.  I should get caught up again today.

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.

Today, I BTC 2 ACI Jan09 35 Puts and STO 2 ACI Jan10 35 Puts for a net deposit of $421.00 in my taxable account.  If put to me today my basis would be 29.54 for these ACI shares.

This is my taxable account and I am still trying to generate cash and postpone potential Put assignments by rolling out upcoming Puts.  All other things being equal I would probably be okay owning ACI.  I tend to think that coal will continue to be a major fuel for electrical generation.  On the negative side is that if Obama is elected I understand that he is does not think much of coal.  Even so, it is one of our most abundant domestic energy sources and its time will come sooner or later.