Knowing just how bizarre this market really is, consider selling to close the second half of the KB Home (KBH) April 17 put for gains of up to 79% on the second half. The first half was exited for gains of up to 53% on December 2, 2014. Since recommendation, the underlying stock has fallen from about $17.75 to $16.19, resulting in the gain on the put.
While I’d like to stay in the KBH position a bit longer, it’s best if we take the gain here. A doji cross near the 50-day moving average may be indicating a change of sentiment.
Also, if you’re happy with the current gain on the Lennar (LEN) February 47 put, consider selling to close just half of that, as well. Hold the second half. The underlying is incredibly overbought after a run from $38 to $48. Still, I’d like to protect some gains here.
Hold all other positions… and stay tuned for new trade ideas.
If you have an opportunity, I’d love to hear how you’ve done with trades for 2014. Despite some losses, we’ve closed quite a few winners.
Happy holidays to you and your families… Best wishes.
Ian L. Cooper
Inside Value Trader