Random Thoughts

1) It looks like Europe is joining the hocus pocus of their central bank buying their own bonds. This should buoy markets for a while although it probably only kicks the can down the road.

2) Precious metals seem to be back in bull mode. Buying (put selling) the dips might be hard because there might not be many dips for a while. Some well placed out of the money puts in your favorite precious metals stocks and/or ETF's seem to be nice setups for profitability. On a side note it looks like GDX is rising today so I may be able to close out my long and winding GDX trade for a profit and without paying a commission. My GDX trades have proven, once again, that I've made the most money when the trade goes against me. Strange but true. The answer lies in increased volatility and corresponding higher premiums. It pays to trade high volume stocks/ETF's in that regard.

3) I tripled down on Intel. The low P/E, large cash position, high and rising dividend, high volume and high volatility seem to make it a great candidate for out of the money put writing right now. I will post later today about the 22's I sold yesterday. If put to me the yield will be well over 4%. Unless I'm missing something that is a great buoy for the strike price.

4) Do you have a watchlist set up of the stocks you like to trade? How large is this watchlist? If you have a select group of stocks that you like to trade it is easy to recognize when one drops into or below it's normal trading range. While some would call that a bearish signal I call it a great opportunity to write out of the money puts well below it's normal trading range. If the stock drops more than you expect it may be easy to roll down and out for a net credit because it's volatility will have increased thereby providing increased premiums.

5) Writing puts on rising dividend stocks can be very profitable. It is good to research historic yields. If you write out of the money puts that if put to you would yield higher than it has historically, you have probability and reversion to the mean on your side.Time has taught me to never underestimate the power of reversion to the mean. Writing out of the money puts before an anticipated dividend rise is an additional strategy I like to implement. If you Google "Dividend Champions",  that site has info on when the next dividend rise is expected to happen.

6) I'm keeping an eye on Walgreen's. Same store sales are down and there is still fall out from the Express Scripts debacle. If out of the money puts start making sense at the 30 strike I might just have to climb aboard. WAG at 30 yields 3.66%. That sounds like a price buoy to me.

7) Bank of America is up big today. I didn't pull the trigger and sell the 7 puts when it dropped below 8. That will not happen again as the Fed appears to be a great insurance policy and housing seems to have bottomed.

8) I have seen an increase in comments to my posts. This is most welcome as my friends and family do not have the knowledge nor the interest in speaking of the things I post about. There eyes glaze over as if I'm trying to sell them insurance. :)  In many ways trading is a loners pursuit. In my perfect world our discourse will grow and we will build community right here on this li'l ol' blog. Please feel free to share your trades/thoughts. Have a great day!