Well, as I said, I put in an order before the opening for .40 for the AMZN puts. The order was ignored...lol. The premium was dropping fast as AMZN was ticking up. So instead of chasing the premium and always being behind the curve, I just put in an order for At The Market. These went through at .27. These puts need approximately 25.02 each for maintenance. This equals a profit of a tad over 1% for three days.
*A quick perspective on profits.
I am on a BOD for a home owners association. We have extra funds in our reserve account that require safety and this results in us depositing our funds in MMKT accounts. While searching for some rates with local banks yesterday, I found that a common rate is .9% for a year. So with my private account when i can get over 1% in three days, you've gotta like that.
I am often asked, how I can be happy getting only premiums such as today's .27. I try to keep the perspective that end results are what count.
If I can trade and maintain around 3% MONTHLY, I am a happy camper. As I say in my book, "I just continue to pick up the crumbs around the table."
Good trading all.
Wednesday, November 17, 2010
I'm back
Hi all, well I'm back and diving in. With a week to go I still like using the last of the Nov puts.
I am selling AMZN puts.
With AMZN selling around 158.3, I'm selling the 150 put.
I anticipate that they will sell for somewhere around .40 at the
opening. With only 3 days of trading left and one of those is starting
off with AMZN heading up at the opening, things look good. The return is around 1.5%. As this is for three days I like it.
If you are thinking of doing any of these (or other NOV) puts. I advise you to jump in early as the time decay will be quick.
Thursday more puts will come on line for all weeklies.
Hope all of you have made some money while I was away.
It is good to be back!
I am selling AMZN puts.
With AMZN selling around 158.3, I'm selling the 150 put.
I anticipate that they will sell for somewhere around .40 at the
opening. With only 3 days of trading left and one of those is starting
off with AMZN heading up at the opening, things look good. The return is around 1.5%. As this is for three days I like it.
If you are thinking of doing any of these (or other NOV) puts. I advise you to jump in early as the time decay will be quick.
Thursday more puts will come on line for all weeklies.
Hope all of you have made some money while I was away.
It is good to be back!
Wednesday, November 3, 2010
Leave of absence
Hi Traders, I will be out of town until the 14th of Nov. I am letting my GOOG puts run as I like them and there is plenty of time.
I think the elections will be good for business. The mkt had already figured in the results so not much action today in the big market. More important news coming during this week. So keep your powder dry, and make careful trades.
See ya in 10 days.
I think the elections will be good for business. The mkt had already figured in the results so not much action today in the big market. More important news coming during this week. So keep your powder dry, and make careful trades.
See ya in 10 days.
Tuesday, November 2, 2010
OK, I changed my mind
Hi Traders. Yesterday I opened the naked calls with NFLX trading around 167. I sold the naked calls for .73 net or $737.
Today i closed the position for two main reasons.
1. NFLX is heading up over 5 pts so far. This isn't a real problem as
I had a buy order in for the stock if it crossed 184.
2. I am leaving town for 10 days tomorrow and will be out of all contact.
No TV, cell or any other means of finding out what is going on in the
financial world. I could just leave and let the position do what ever it wants, but it is just something that i do not want on my mind while I am gone. If NFLX had gone down some this morning I would probably have left it open as it would have seemed even more safe. It now is possible for NFLX to 'maybe' make it to 185 or above. Not likely butttt....
3. I closed the position for $592 so i made some money in one day -145 when the dust settled.
The interesting part is how even though NFLX went up over 5 dollars the naked call went down. That is a classic example of premium being eaten up by the TIME factor.
As you can see by my trading style, if something goes different than I expected I do not hesitate to pull the trigger. To me that is an important part of trading. You can not be the deer in the headlights and just stare at the monitor wondering ..What's gonna happen next. You have to be decisive. You will be wrong often but hopefully you make profits and sleep better. As I've said in the past, I had those months where I tossed and turned all night. Those days are in the past for me. I will open a position for a specific reason and if it does not work out as anticipated... I close it and move on.
Good trading all.
Today i closed the position for two main reasons.
1. NFLX is heading up over 5 pts so far. This isn't a real problem as
I had a buy order in for the stock if it crossed 184.
2. I am leaving town for 10 days tomorrow and will be out of all contact.
No TV, cell or any other means of finding out what is going on in the
financial world. I could just leave and let the position do what ever it wants, but it is just something that i do not want on my mind while I am gone. If NFLX had gone down some this morning I would probably have left it open as it would have seemed even more safe. It now is possible for NFLX to 'maybe' make it to 185 or above. Not likely butttt....
3. I closed the position for $592 so i made some money in one day -145 when the dust settled.
The interesting part is how even though NFLX went up over 5 dollars the naked call went down. That is a classic example of premium being eaten up by the TIME factor.
As you can see by my trading style, if something goes different than I expected I do not hesitate to pull the trigger. To me that is an important part of trading. You can not be the deer in the headlights and just stare at the monitor wondering ..What's gonna happen next. You have to be decisive. You will be wrong often but hopefully you make profits and sleep better. As I've said in the past, I had those months where I tossed and turned all night. Those days are in the past for me. I will open a position for a specific reason and if it does not work out as anticipated... I close it and move on.
Good trading all.
Monday, November 1, 2010
Additional points regarding my trade with the naked calls
I didn't mention the profit percentage of this trade.
I took in 737 and needed 25,534 in maintenance funds. 25534 div by 737 = 2.88 % return for 4.5 day trade.
Before doing these naked calls that might involve having to buy the stock to cover your 'what if' scenario. You must be sure you have enough stock buying capability (funds). Also If as i mentioned the potential of buying stock and then it dropping back below what was you trigger point (184 in this case)
I will then own the stock and I will either just sell it next week or sell covered calls on the existing stock.
If any questions regarding this type of trade just add a comment on the posting and I will try to answer it as soon as i see your posting.
I took in 737 and needed 25,534 in maintenance funds. 25534 div by 737 = 2.88 % return for 4.5 day trade.
Before doing these naked calls that might involve having to buy the stock to cover your 'what if' scenario. You must be sure you have enough stock buying capability (funds). Also If as i mentioned the potential of buying stock and then it dropping back below what was you trigger point (184 in this case)
I will then own the stock and I will either just sell it next week or sell covered calls on the existing stock.
If any questions regarding this type of trade just add a comment on the posting and I will try to answer it as soon as i see your posting.
An opposite type trade
Ok, I hope I don't confuse you with this trade. I am doing a type of trade that I like in down-or flat markets. I am selling naked CALLS..
If you have read my book I have a chapter on this method. It is quite easy and similar but on the opposite side of naked puts.
I sold the naked calls for NFLX
with NFLX trading around 167.5 I sold the Nov 5 (weekly) 185 call.
I sold 10 of them for $737.
My plan is that NFLX will not go up to 185 during this week. And if that happens (stays below 185) then the naked calls just go away. If NFLX starts up i will have in place an order to buy the stock at 184. So the hoped for result is that nflx will then continue above 185 and I will have the stock and it will be called away. So i make another 1000 buy for 184. Called away for 185. This plus the 737. will make a nice profit any way it shakes out. The worst is the nflx goes to the 184 point and triggers my buy order and then drops down. But that is a lot of 'ifs' for only one week.
If you have read my book I have a chapter on this method. It is quite easy and similar but on the opposite side of naked puts.
I sold the naked calls for NFLX
with NFLX trading around 167.5 I sold the Nov 5 (weekly) 185 call.
I sold 10 of them for $737.
My plan is that NFLX will not go up to 185 during this week. And if that happens (stays below 185) then the naked calls just go away. If NFLX starts up i will have in place an order to buy the stock at 184. So the hoped for result is that nflx will then continue above 185 and I will have the stock and it will be called away. So i make another 1000 buy for 184. Called away for 185. This plus the 737. will make a nice profit any way it shakes out. The worst is the nflx goes to the 184 point and triggers my buy order and then drops down. But that is a lot of 'ifs' for only one week.
Closing a position
G'morning, A few minutes ago i closed my NFLX position.
I had sold the puts on 10/22 for +1195.
I closed on 11/1 for -748.
Profit in 9 days of ..............+447
the reason for closing are on at least two levels
a. NFLX is declining today as it is down around $5
b. I had a profit and I hate to give up a profit. Yes it wasn't as much as I had hoped, but a profit sure beats a loss! For me, I acted on the old adage 'You are never wrong to take profit' The position was probably still safe. However I don't want to watch the stock continue on down and pretty soon I would be wondering, why oh why didn't I follow my gut instincts and close it. As I mention in my book, when you start getting the feeling of 'what's going on here?' It is usually time to close the position.
So for now I am pretty much sitting on the sidelines trying to wait out the week ahead of us. A lot of news coming this week so I recommend if you plan on opening new positions use the utmost caution. I could be really good or so-so or really ugly. When I have no real feeling on the direction or things..I try to step back and wait!
Good trading all
I had sold the puts on 10/22 for +1195.
I closed on 11/1 for -748.
Profit in 9 days of ..............+447
the reason for closing are on at least two levels
a. NFLX is declining today as it is down around $5
b. I had a profit and I hate to give up a profit. Yes it wasn't as much as I had hoped, but a profit sure beats a loss! For me, I acted on the old adage 'You are never wrong to take profit' The position was probably still safe. However I don't want to watch the stock continue on down and pretty soon I would be wondering, why oh why didn't I follow my gut instincts and close it. As I mention in my book, when you start getting the feeling of 'what's going on here?' It is usually time to close the position.
So for now I am pretty much sitting on the sidelines trying to wait out the week ahead of us. A lot of news coming this week so I recommend if you plan on opening new positions use the utmost caution. I could be really good or so-so or really ugly. When I have no real feeling on the direction or things..I try to step back and wait!
Good trading all
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