On October 10, 2012 I continued the following transaction:
08/24/12 STO 5 INTC Oct 20 2012 23 Puts @.35 161.20
10/10/12 BTC 5 INTC Oct 20 2012 23 Puts @1.22 -623.79
10/10/12 STO 5 INTC Nov 17 2012 23 Puts @1.53 761.14
This is how I played the Intel tank on these puts last month. On this trade I have now brought in $298.55 in option premium. If put to me my cost basis is down to $22.40. I anticipate rolling these puts out, rolling out and reducing a contract or rolling down and out. All this will occur prior to option expiration and will only be done for a net credit.
Even though INTC has tanked I am still bringing in regular income and reducing my cost basis in the stock. Unfortunately, my margin maintenance has increased substantially and of this writing it sits at $2800.
I very recently thought Intel had bottomed but now there are rumors that Apple wants to build their own processors and not use Intel anymore. Intel is a huge multinational with a rising dividend so I'm not too worried. I will keep on: rolling, rolling, rolling...
Showing posts with label trade continuation. Show all posts
Showing posts with label trade continuation. Show all posts
Tuesday, November 6, 2012
Friday, November 2, 2012
Trade Continuation: Intel (INTC) Naked Puts
On October 10th I rolled this Intel trade as follows:
08/22/12 STO 5 INTC Oct 20 2012 24 Puts @.37 $171.18
10/10/12 BTC 5 INTC Oct 20 2012 24 Puts @2.15 -1088.79
10/10/12 STO 5 INTC Nov 17 2012 24 Puts @2.40 1196.13
It's no secret that Intel tanked...and hard. When I entered into this trade Intel was at 25.70 and it tanked to the low 21's.
I rolled these puts out a month for a net credit of $107.34. I have now brought in $278.51 in option premium. This lowers my cost basis in INTC to $23.44. As of this writing that puts me down ~.96/share. Not bad for a complete tank job! Put selling is a very valuable trading tool.
Absent unforeseen circumstances, I will roll these puts again in a couple of weeks, dropping my cost basis once more. I can roll out at the same strike with 5 contracts, roll out at the same strike lowering to 4 contracts or roll out and down. I will only do so for a net credit.
08/22/12 STO 5 INTC Oct 20 2012 24 Puts @.37 $171.18
10/10/12 BTC 5 INTC Oct 20 2012 24 Puts @2.15 -1088.79
10/10/12 STO 5 INTC Nov 17 2012 24 Puts @2.40 1196.13
It's no secret that Intel tanked...and hard. When I entered into this trade Intel was at 25.70 and it tanked to the low 21's.
I rolled these puts out a month for a net credit of $107.34. I have now brought in $278.51 in option premium. This lowers my cost basis in INTC to $23.44. As of this writing that puts me down ~.96/share. Not bad for a complete tank job! Put selling is a very valuable trading tool.
Absent unforeseen circumstances, I will roll these puts again in a couple of weeks, dropping my cost basis once more. I can roll out at the same strike with 5 contracts, roll out at the same strike lowering to 4 contracts or roll out and down. I will only do so for a net credit.
Wednesday, July 25, 2012
Trade Continuation: GDX Naked Puts
Last week I continued my GDX investment as follows:
03/20/2012 STO 3 GDX Apr 21 2012 47.0 Put @ .53 146.75
04/20/2012 BTC 3 GDX Apr 21 2012 47.0 Put @.63 -201.24
04/20/2012 STO 3 GDX May 19 2012 45 Put @.97 288.70
05/14/2012 BTC 3 GDX May 19 2012 45 Put @3.46 1050.24
05/14/2012 STO 3 GDX Jun 16 2012 45 Put @3.99 1194.68
06/01/2012 BTC 3 GDX Jun 16 2012 45 Put @1.20 - 372.25
06/01/2012 STO 3 GDX Jul 21 2012 43 Put @1.60 467.74
07/19/2012 BTC 3 GDX Jul 21 2012 43 Put @1.40 -432.24
07/19/2012 STO 2 GDX Sep 22 2012 42 Put @2.41 470.50
In this latest option roll I was able to get paid $38.26 to roll down a strike AND to reduce my exposure to 2 contracts. By reducing the number of contracts we were able to reduce our maintenance requirement from ~$3200 to ~$2100 thereby freeing up money for other trades. In addition, our percentage return on maintenance increases with the reduction in required maintenance.
It had never occurred to me before to reduce the number of contracts as I roll down and out. Props to Teddi Knight at FullyInformed.com for sharing her experience and insight in that regard.
We have now collected $512.40 in option premium on this trade. Our cost basis if put to us is down to $39.44/share. While this ETF has sunk to new lows recently our cost basis is below that.
The September expiration will make this trade 6 months old. If the shares expire worthless we will earn $512.40 on an average of ~$2600 in margin maintenance. This equates to a return on maintenance of ~19.7% or or 39.4% annual.
03/20/2012 STO 3 GDX Apr 21 2012 47.0 Put @ .53 146.75
04/20/2012 BTC 3 GDX Apr 21 2012 47.0 Put @.63 -201.24
04/20/2012 STO 3 GDX May 19 2012 45 Put @.97 288.70
05/14/2012 BTC 3 GDX May 19 2012 45 Put @3.46 1050.24
05/14/2012 STO 3 GDX Jun 16 2012 45 Put @3.99 1194.68
06/01/2012 BTC 3 GDX Jun 16 2012 45 Put @1.20 - 372.25
06/01/2012 STO 3 GDX Jul 21 2012 43 Put @1.60 467.74
07/19/2012 BTC 3 GDX Jul 21 2012 43 Put @1.40 -432.24
07/19/2012 STO 2 GDX Sep 22 2012 42 Put @2.41 470.50
In this latest option roll I was able to get paid $38.26 to roll down a strike AND to reduce my exposure to 2 contracts. By reducing the number of contracts we were able to reduce our maintenance requirement from ~$3200 to ~$2100 thereby freeing up money for other trades. In addition, our percentage return on maintenance increases with the reduction in required maintenance.
It had never occurred to me before to reduce the number of contracts as I roll down and out. Props to Teddi Knight at FullyInformed.com for sharing her experience and insight in that regard.
We have now collected $512.40 in option premium on this trade. Our cost basis if put to us is down to $39.44/share. While this ETF has sunk to new lows recently our cost basis is below that.
The September expiration will make this trade 6 months old. If the shares expire worthless we will earn $512.40 on an average of ~$2600 in margin maintenance. This equates to a return on maintenance of ~19.7% or or 39.4% annual.
Friday, June 8, 2012
Trade Continuation: GDX Naked Puts
Yesterday I continued the following transaction:
03/19/2012 STO 3 GDX Jun 16 2012 45 Puts@.99 284.71
06/07/2012 BTC 3 GDX Jun 16 2012 45 Puts@.68 -216.28
06/07/2012 STO 3 GDX Jul 21 2012 42 Puts@.99 284.71
I took the opportunity with the recent strength in GDX to roll out and down 3 strikes for a net credit of $68.43. We have now collected $353.14 in option premium. If put to us at the new strike our cost basis will be $40.82. Not bad considering GDX was trading at 50 at the time we entered into this trade.
If these puts expire worthless we will earn $353.14 in 4 months on an average of ~$2300 in margin maintenance. This equates to a 15.35% return on maintenance or ~46% annual.
03/19/2012 STO 3 GDX Jun 16 2012 45 Puts@.99 284.71
06/07/2012 BTC 3 GDX Jun 16 2012 45 Puts@.68 -216.28
06/07/2012 STO 3 GDX Jul 21 2012 42 Puts@.99 284.71
I took the opportunity with the recent strength in GDX to roll out and down 3 strikes for a net credit of $68.43. We have now collected $353.14 in option premium. If put to us at the new strike our cost basis will be $40.82. Not bad considering GDX was trading at 50 at the time we entered into this trade.
If these puts expire worthless we will earn $353.14 in 4 months on an average of ~$2300 in margin maintenance. This equates to a 15.35% return on maintenance or ~46% annual.
Friday, June 1, 2012
Trade Continuation: GDX Naked Puts
Today I took advantage of the strength in GDX to continue this trade as follows:
03/20/2012 STO 3 GDX Apr 21 2012 47.0 Put @ .53 146.75
04/20/2012 BTC 3 GDX Apr 21 2012 47.0 Put @.63 -201.24
04/20/2012 STO 3 GDX May 19 2012 45 Put @.97 288.70
05/14/2012 BTC 3 GDX May 19 2012 45 Put @3.46 1050.24
05/14/2012 STO 3 GDX Jun 16 2012 45 Put @3.99 1194.68
06/01/2012 BTC 3 GDX Jun 16 2012 45 Put @1.20 - 372.25
06/01/2012 STO 3 GDX Jul 21 2012 43 Put @1.60 467.74
We were able to roll out and down two strikes for a net credit of $95.49. This increases the amount of option premium collected on this trade to $474.14. If put to us our cost basis will be down to $41.42. This ETF is presently trading at $45.84. Although GDX is volatile this is a nice cushion and we have multiple rolling opportunities available to us if need be. If these puts expire worthless we will earn $467.74 in 4 months on ~$3000 in margin maintenance. This equates to a return of 15.6% or 49.8% annual.
This trade demonstrates the power of put selling. When I entered this trade GDX was just below 50 which I incorrectly thought was a strong support level. At one point during this transaction GDX had fallen below 40. Weak hands were flushed but I stuck to my guns. Some would say I was foolish, however, there were so many strikes to roll out and down to I was not going to be a weak hand who bought high and sold low.
I'm not out of the woods on this trade yet, however, I am feeling like I'm in the driver's seat. I'm learning that when a stock tanks, the volatility and the premiums increase thereby creating opportunities for enhanced returns. It seems odd that some of my greatest returns are on trades that initially went against me. Many seasoned traders would have been "prudently" stopped out.
Note: Why didn't I hold the June puts to expiration and drain all the time value and take advantage of the great time decay in the last two weeks? Two reasons: 1) when the opportunity presented I wanted to roll down and out 2 strikes and get paid ~$100 to do it; and 2) I'm going to be on vacation options expiration week and I don't want to have any trading concerns on my mind. Silly reason? Obviously I don't think so. :)
03/20/2012 STO 3 GDX Apr 21 2012 47.0 Put @ .53 146.75
04/20/2012 BTC 3 GDX Apr 21 2012 47.0 Put @.63 -201.24
04/20/2012 STO 3 GDX May 19 2012 45 Put @.97 288.70
05/14/2012 BTC 3 GDX May 19 2012 45 Put @3.46 1050.24
05/14/2012 STO 3 GDX Jun 16 2012 45 Put @3.99 1194.68
06/01/2012 BTC 3 GDX Jun 16 2012 45 Put @1.20 - 372.25
06/01/2012 STO 3 GDX Jul 21 2012 43 Put @1.60 467.74
We were able to roll out and down two strikes for a net credit of $95.49. This increases the amount of option premium collected on this trade to $474.14. If put to us our cost basis will be down to $41.42. This ETF is presently trading at $45.84. Although GDX is volatile this is a nice cushion and we have multiple rolling opportunities available to us if need be. If these puts expire worthless we will earn $467.74 in 4 months on ~$3000 in margin maintenance. This equates to a return of 15.6% or 49.8% annual.
This trade demonstrates the power of put selling. When I entered this trade GDX was just below 50 which I incorrectly thought was a strong support level. At one point during this transaction GDX had fallen below 40. Weak hands were flushed but I stuck to my guns. Some would say I was foolish, however, there were so many strikes to roll out and down to I was not going to be a weak hand who bought high and sold low.
I'm not out of the woods on this trade yet, however, I am feeling like I'm in the driver's seat. I'm learning that when a stock tanks, the volatility and the premiums increase thereby creating opportunities for enhanced returns. It seems odd that some of my greatest returns are on trades that initially went against me. Many seasoned traders would have been "prudently" stopped out.
Note: Why didn't I hold the June puts to expiration and drain all the time value and take advantage of the great time decay in the last two weeks? Two reasons: 1) when the opportunity presented I wanted to roll down and out 2 strikes and get paid ~$100 to do it; and 2) I'm going to be on vacation options expiration week and I don't want to have any trading concerns on my mind. Silly reason? Obviously I don't think so. :)
Monday, May 14, 2012
Trade Continuation: GDX Naked Puts
Well this one has been a wild ride. :) GDX is trading at ~41.50/share at the time of this writing. I continued the transaction as follows:
03/20/2012 STO 3 GDX Apr 21 2012 47.0 Put @ .53 146.75
04/20/2012 BTC 3 GDX Apr 21 2012 47.0 Put @.63 -201.24
04/20/2012 STO 3 GDX May 19 2012 45 Put @.97 288.70
05/14/2012 BTC 3 GDX May 19 2012 45 Put @3.46 1050.24
05/14/2012 STO 3 GDX Jun 16 2012 45 Put @3.99 1194.68
We rolled out for a net credit of $144.44. We have now brought in $378.65 in option premium. Our cost basis @ the 45 put strike is now $43.73. I considered rolling out and down for a net credit to the September 43 puts but I didn't want to commit to that much time.
There are plenty of strikes to roll out and down to if need be. Whatever we do it will only be for a net credit. Are we near the bottom? If not we will deal with it after all the time value has been drained from this continuation trade. The maintenance on this trade has increased to ~$3500.
We might want to roll down and out for a credit while lowering the number of contracts to 2 when the opportunity presents itself.
03/20/2012 STO 3 GDX Apr 21 2012 47.0 Put @ .53 146.75
04/20/2012 BTC 3 GDX Apr 21 2012 47.0 Put @.63 -201.24
04/20/2012 STO 3 GDX May 19 2012 45 Put @.97 288.70
05/14/2012 BTC 3 GDX May 19 2012 45 Put @3.46 1050.24
05/14/2012 STO 3 GDX Jun 16 2012 45 Put @3.99 1194.68
We rolled out for a net credit of $144.44. We have now brought in $378.65 in option premium. Our cost basis @ the 45 put strike is now $43.73. I considered rolling out and down for a net credit to the September 43 puts but I didn't want to commit to that much time.
There are plenty of strikes to roll out and down to if need be. Whatever we do it will only be for a net credit. Are we near the bottom? If not we will deal with it after all the time value has been drained from this continuation trade. The maintenance on this trade has increased to ~$3500.
We might want to roll down and out for a credit while lowering the number of contracts to 2 when the opportunity presents itself.
Friday, April 20, 2012
Trade Continuation: GDX Naked Puts
Today on options expiration Friday I continued the following transaction:
03/20/2012 STO 3 GDX Apr 21 2012 47.0 Put @ .53 146.75
04/20/2012 BTC 3 GDX Apr 21 2012 47.0 Put @.63 -201.24
04/20/2012 STO 3 GDX May 19 2012 45 Put @.97 288.70
GDX has trended downward and was at ~46.40 when I continued this transaction. After draining every drop of time value I rolled out one month and down two strikes for a net credit. Margin maintenance on this trade is ~$2800. If these puts expire worthless we will earn $234.21 in 61 days which is an 8.36% return on maintenance or 50% annual. At the close GDX dropped down to 46.10. The precious metals miners have not been able to get much of a bid. Sentiment is very low and most of the weak hands have had to have been scared away. In the event GDX continues its downward descent I will look to roll out and down again for a net credit. If put to us our cost basis will be $44.21 so we still have some breathing room in this trade. We will have time decay over the weekend and I won't look to roll down and out until I've wrung every drop of time value out of this trade.
Note: when these puts went into the money, margin maintenance increased to ~$3200 which will lower the returns
03/20/2012 STO 3 GDX Apr 21 2012 47.0 Put @ .53 146.75
04/20/2012 BTC 3 GDX Apr 21 2012 47.0 Put @.63 -201.24
04/20/2012 STO 3 GDX May 19 2012 45 Put @.97 288.70
GDX has trended downward and was at ~46.40 when I continued this transaction. After draining every drop of time value I rolled out one month and down two strikes for a net credit. Margin maintenance on this trade is ~$2800. If these puts expire worthless we will earn $234.21 in 61 days which is an 8.36% return on maintenance or 50% annual. At the close GDX dropped down to 46.10. The precious metals miners have not been able to get much of a bid. Sentiment is very low and most of the weak hands have had to have been scared away. In the event GDX continues its downward descent I will look to roll out and down again for a net credit. If put to us our cost basis will be $44.21 so we still have some breathing room in this trade. We will have time decay over the weekend and I won't look to roll down and out until I've wrung every drop of time value out of this trade.
Note: when these puts went into the money, margin maintenance increased to ~$3200 which will lower the returns
Sunday, March 18, 2012
Trade Continuation: Walgreen's (WAG) Naked Puts
In a taxable account I continued the following transaction:
02/27/2012 STO 4 WAG Mar 17 2012 32 Puts @.23 78.99
03/06/2012 BTC 4 WAG Mar 17 2012 32 Puts @.3 -133.00
03/06/2012 STO 4 WAG Apr 21 2012 31 Puts @.7 276.94
This was another trade I couldn't monitor while on vacation and disconnected from the world... so I rolled it down and out for a credit. Margin maintenance on this trade is down to $1532.00. If these expire worthless we will earn $222.93 in 54 days which equates to a return on maintenance of 14.55% or 98.35% annual. Not too shabby. :)
02/27/2012 STO 4 WAG Mar 17 2012 32 Puts @.23 78.99
03/06/2012 BTC 4 WAG Mar 17 2012 32 Puts @.3 -133.00
03/06/2012 STO 4 WAG Apr 21 2012 31 Puts @.7 276.94
This was another trade I couldn't monitor while on vacation and disconnected from the world... so I rolled it down and out for a credit. Margin maintenance on this trade is down to $1532.00. If these expire worthless we will earn $222.93 in 54 days which equates to a return on maintenance of 14.55% or 98.35% annual. Not too shabby. :)
Thursday, March 8, 2012
Trade Continuation: Pepsico (PEP) Naked Puts
A couple of days ago in a taxable account I continued the following transaction:
02/09/2012 STO 2 PEP Mar 17 2012 62.5 Puts @.7 128.51
03/06/2012 BTC 2 PEP Mar 17 2012 62.5 Puts @.63 -137.48
03/06/2012 STO 2 PEP July 21 2012 60 Puts @1.58 314.36
With a drop in PEP price below 62.5, I rolled this position for a unique reason. I'm too busy right now with my business to monitor these trades and I'm going on vacation next week during option expiration and won't have good computer access. I rolled out and down for a net credit. If put to me my cost basis will be ~58.50/share and Pepsico is set for another dividend raise so the yield on cost will be a juicy 3.75% or so. In my opinion, that ain't gonna happen. If it does I feel great about this becoming a great enhanced income, double dividend candidate. In other words I'll start writing covered calls on the position collecting option premium and dividends. BTW for this trade we are using $2257.77 in margin maintenance. If they expire worthless we will earn $305.39 in 171 days which equates to 13.53% or 28.87% annual.
02/09/2012 STO 2 PEP Mar 17 2012 62.5 Puts @.7 128.51
03/06/2012 BTC 2 PEP Mar 17 2012 62.5 Puts @.63 -137.48
03/06/2012 STO 2 PEP July 21 2012 60 Puts @1.58 314.36
With a drop in PEP price below 62.5, I rolled this position for a unique reason. I'm too busy right now with my business to monitor these trades and I'm going on vacation next week during option expiration and won't have good computer access. I rolled out and down for a net credit. If put to me my cost basis will be ~58.50/share and Pepsico is set for another dividend raise so the yield on cost will be a juicy 3.75% or so. In my opinion, that ain't gonna happen. If it does I feel great about this becoming a great enhanced income, double dividend candidate. In other words I'll start writing covered calls on the position collecting option premium and dividends. BTW for this trade we are using $2257.77 in margin maintenance. If they expire worthless we will earn $305.39 in 171 days which equates to 13.53% or 28.87% annual.
Monday, January 30, 2012
Trade Continuation: Conoco-Phillips (COP) Covered Calls
Today in a traditional IRA I continued the following transaction:
01/13/2012 Bought 200 COP @ 70.29 -14,067.97
01/13/2012 STO 2 COP Jan 21 2012 70 Calls @.99 186.47
01/20/2012 BTC 2 COP Jan 21 2012 70 Calls @.77 -165.52
01/20/2012 STO 2 COP Jan 27 2012 70 Calls @1.35 +258.45
01/30/2012 STO 2 COP Feb 18 2012 70 Calls @.58 +104.47
Our January calls expired worthless so I wrote new calls. Due to a family emergency it will be hard to trade weekly options so I wrote these 19 days out. This lowers our out of pocket to $13684.10 or $68.42/share. COP goes ex-dividend on Feb. 17 so if the stock price rises above 70 I may roll the position to make sure I collect the dividend. The dividend will most likely rise this quarter.
01/13/2012 Bought 200 COP @ 70.29 -14,067.97
01/13/2012 STO 2 COP Jan 21 2012 70 Calls @.99 186.47
01/20/2012 BTC 2 COP Jan 21 2012 70 Calls @.77 -165.52
01/20/2012 STO 2 COP Jan 27 2012 70 Calls @1.35 +258.45
01/30/2012 STO 2 COP Feb 18 2012 70 Calls @.58 +104.47
Our January calls expired worthless so I wrote new calls. Due to a family emergency it will be hard to trade weekly options so I wrote these 19 days out. This lowers our out of pocket to $13684.10 or $68.42/share. COP goes ex-dividend on Feb. 17 so if the stock price rises above 70 I may roll the position to make sure I collect the dividend. The dividend will most likely rise this quarter.
Friday, January 20, 2012
Trade Continuation: Conoco Phillips (COP) Covered Calls
Today in a taxable account I continued the following transaction:
01/13/2012 Bought 200 COP @ 70.29 -14,067.97
01/13/2012 STO 2 COP Jan 21 2012 70 Calls @.99 186.47
01/20/2012 BTC 2 COP Jan 21 2012 70 Calls @.77 -165.52
01/20/2012 STO 2 COP Jan 27 2012 70 Calls @1.35 +258.45
We rolled the covered call for a net credit of $92.93. This lowers our out of pocket to $13788.57 or $68.94/share. If we get called away we will make $190.43 in 2 weeks. This equates to a return of 1.4% or 35.9% annual. Before we get exercised we will look to roll the options again with an eye on the weeklys.
01/13/2012 Bought 200 COP @ 70.29 -14,067.97
01/13/2012 STO 2 COP Jan 21 2012 70 Calls @.99 186.47
01/20/2012 BTC 2 COP Jan 21 2012 70 Calls @.77 -165.52
01/20/2012 STO 2 COP Jan 27 2012 70 Calls @1.35 +258.45
We rolled the covered call for a net credit of $92.93. This lowers our out of pocket to $13788.57 or $68.94/share. If we get called away we will make $190.43 in 2 weeks. This equates to a return of 1.4% or 35.9% annual. Before we get exercised we will look to roll the options again with an eye on the weeklys.
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