zoom out

I wanted to take a step back and take a look at this 10 year chart - just as a reminder of where we've been and what can happen. No, I don't think we're headed back to 767 any time soon (or ever).

Note: the Fed doesn't often bail out individual companies as it did with BSC on Friday.
In the case of LTCM (http://en.wikipedia.org/wiki/Long-Term_Capital_Management), for example, I can see the downside of allowing the world to go bankrupt but I don't think it's the Fed's job to make sure that a presumably much smaller company gets bailed out from exhibiting, albeit in hindsight, poor risk management.
Is it really a better policy to artificially bolster the market at the expense of inflation and devaluing my currency? Apparently.There is certainly more downside risk than upside but please be careful. Tuesday showed us how violent these bear market rallies can be and it's real easy to to whipsawed. The worst part about this downward bias, from an option selling standpoint, is that it is difficult to get the credit you'd expect from selling OTM calls - this of course is due to the volatility skew. It means you either have to sell on the put side at a seemingly safe level (delta of .06 - .07) and except the downside risk, OR sell OTM calls with a delta closer to .20 to get a decent premium.

This has been a hectic week for the market so I have hesitated putting on any new trade recommendations - although it seems my original trade recommendation (below) would still be working out quite well for you.
There is no need for any trade adjustments at this point.

Shameless Plug: Speaking of trade adjustments in general, here is a free spreadsheet to help you out.
http://www.strategicmodeling.com/Products.htm
Scroll down and click on the icon 'Option Adjust' and the download will start automatically. Depending on your internet browser settings it will either open itself when it's done downloading or it will prompt you on where to save it.
Basically, enter your current position (using drop-down menus), what the market has done since you entered said position, and your short-term outlook on the market. The spreadsheet will then provide you with several suggestions on ways to adjust your position to either lock in profits, cut losses, or generate additional cash flow. Oh, and did I mention, it's free.

In the near future, I will post some more trade opportunities with screenshots of their respective trade calculators.