First trade this morning
I sold 30 puts with LVS. Lvs is trading around 47.5 and I sold the 38 strike price. These sold for a net of .34. The maintenance required is 12,660. so I netted 1,022 for a return of a little over 8%
To me, whenever I open a position and I make over 6%, as a rule I get nervous. Over 6% is a red flag that I am pushing the limit on the strike I have chosen. I will ride this position for awhile for several reasons.
1. the picture for Las Vegas in general is getting better
2. I have over 10 points of cushion
3. the last earnings report beat expectations.
This is the first time I have used LVS. If it works out I will leave it on my 'CHECK CLOSE EACH MONTH' list.
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At this time I am watching my roll-up with AMZN. I am not comfortable with AMZN dropping some this morning. I break even roughly if I get out at .15
I now have an order in to buy to close the position for .14 I will see how it goes and keep you informed. As I am away from the computer after 9am (Tee time)I don't want to let my profits erode to far.
This demonstrates that option trading is a business. You can not just open a position and not monitor it.
Ooop's I just received notice that my trade went through regarding the closing of my AMZN position.
Here are those results.
first opened at 1557
closed for 224
opened the roll-up for 774
closed the roll up for 521
Net result for the whole position....
I could have made 1557 but I tweaked it some and made and extra whopping $29 profit for a net of $1586. But 29 extra is not a bad profit, just not fantastic. That is trading. The goal is to make money...crumb by crumb.
8 comments:
Hi Jerry - I sold 15 WYNN 100 puts back on 11/8. They closed yesterday at 109, sitting pretty on the last day! BUT, they opened today at 102. I still can't find bad news so no idea why the 6% plunge. They've recovered a bit to 103.50 so it looks like I'll slide by, but it shows that these gaming stocks can be pretty "dicey". Good luck on LVS!
Glenn, Thanks for the good thoughts. I could close the LVS right now and make about 180 in the last hour but...hmmm. I am leaving in thirty minutes so I might just close them and take the 150+ off the table. Thanks for the heads up.
I received .34 when I opened this position and I think I will put in an order to close at .28 If the order goes through I will make about 175 in a couple of hours. I will also get out of a long term (30) days position. As I had said, the percentage of profit makes me nervous. There is that nagging thought that someone out there knows something that i don't..lol
Hi Jerry
A friend sent me the link to your blog because he knew I also sold puts on LVS last week.
I bought your book and stopped at the chapter under time value and factor. (Needed to ask) You talk about the time value falling off in the 4th week. I was wondering your thoughts on the new weekly options?
This is what drew me to LVS it’s one I would own so Wed. I sold Nov4- 46 puts at .75 it’s mark .255 now. FWIW LVS makes 80%+ there income outside of Lost Wages.
Other than selling puts I also own stock on IWM and SPY I do Covered weekly calls on. Shooting for .75-1% a week before protection.
I will check back after I finish the book,
Good luck
HI Gary, thanks for buying the book and I hope it helps you understand my methods.
Regarding the time value of weeklies. As they are still pretty new, several things seem to effect them,
1. low open interest (but growing quickly) Lower O-I equals less competition so the spread can stay wide between the bid and ask even into the last day.
2. You have to move your strike choice a little closer to the existing stock price so they need to be kept on top of. The result of this is lets say your stock is at 50 and you are using the 47 strike, traders will hold onto the put longer as it is not out of the question (in their minds) that the stock could fall to 47. So they maintain an unrealistic 'ask' price up until the end of the period.
Hope that helps, we are all still learning regarding the weeklies.
Jerry
Hi Jerry
Finished your book found it very well thought out and is a very viable plan for the beginner option trader. I sure would have loved to have read it when I first started out. I have blown up three accounts during my education period. Seems like you get good at something after losing all your money at least twice. Sigh I’m pretty sure you have saved some from getting the one PHD than your better off without.
Also would like to thank you for putting it out there a huge light bulb went on while reading chapter 18 I think there is something there, a one to three day trade combined with the weekly’s and OCO orders. Still working it out in my head.
As far as the volume on the weekly’s goes a few interesting observation. On Fridays if you see one of the heavy hitters open near a strike IE AMZN @170 AAPL @310 BIDU @ 110 or PCLN @410 look at the volume about 45-60 minutes after the open . Then think puts spreads. I won’t spell it out completely as this goes against your don’t get greedy rule and is ONLY for some one that can afford having stock put to them so without saying anything more I think you will see it if you look.
Good luck.
Gary
Got it!!
What do you think of this, I use Think or Swim they have something called think back.
It’s a tick by tick live replay of any day.
Your model chapter 18 plus weekly’s .
I picked a Wednesday Oct. 20 9:45 AM for a two day trade.
BIDU is 101.00
Sell 50 Oct4 BIDU 115 calls @.68 take in 3400.00 Margin is 50K = .068% close to your model
Put in a GTC market order to buy 5000 shares if BIDU marks 111.00
This in a nut shell has taken your one month trade and shortened it to two days?
As far as I can tell looks like every Friday is payday IF you decide to be in the market that week. I will put a few on "paper" and see how it works out.
One new tool for the old trading box.
Thanks
Gary
Hi Gary,
I'm really new and so I'm trying to make sense of your GTC order at 111 mark. Would you be able to explain this to me in lamens terms.
Thanks in adavance
Fulgore
GTC - good till canceled.. If the underling moves against me I buy the stock at 111 and turn the trade in to a covered call.
I poked around more this after noon I think I found an ever better one make it a 3 day trade and sell the 125 your now dealing with a 90% probaly of a win with allmost the same preamion.
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