JOE Put Symbol Updated

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July 25, 2007 | SIN Picks | | Author Asif

The symbol for the $50 Jan 2008 leap puts on home builder St Joe (JOE) has changed from LRXMJ.X to JOEMJ.X and I have updated the model portfolio to reflect this change. This came to my attention when I was looking at the recent price action of St Joe, which has shed almost 25% of its value over the last three months along with the rest of its home builder brethren like Toll Brothers (TOL) and Lennar (LEN). With this recent drop, I was perplexed about why the put options were still showing a loss and that is when I discovered that the symbol had changed. These options are now posting a gain of 37.14% instead of a loss of 18.57%. To learn more about why I chose put options on St Joe, check out my May 2006 blog entry titled Housing Sector in Pain.

After a brief respite, it looks like the subprime mortgage mess is headline news again and Countrywide Financial (CFC) has become the poster child for the sector. Countrywide reported results yesterday with profits declining 33% and the stock dropped 11.4% in sympathy. Rolling our put options into new puts like I suggested in the portfolio update on July 10th would have netted us a very good profit but I hesitated a little too long and can add this trade to my ever growing list of missed opportunities.

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