Hi traders, I have spent an hour or two looking for good positions for the coming week or month. So here goes with some thoughts.
Of course the wild card is the election. There Is talk that the (our) government is running a Ponzi scheme with our U.S. Bonds. If you read my book or some of my post you know that i try to somewhat ignore all the static and just go with good stocks that have decent premiums in the option market. But this coming week could be one of the bigger ones in recent history. I am certainly no 'chartists' but adding fuel to the fire is that a lot of informed people think the market is ready for a significant correction?
I don't run scared but i do try to keep my ear to the ground. So my advice is to be pretty cautious this week.
I now have positions with GOOG. I have over 90 points of cushion so i feel pretty safe there. I also have some NFLX monthly that also have a good cushion. But I will wait until after Thursday morning before I open new ones. That will give Tuesday election results time to be digested.
Protecting capital and not pushing the envelope is the plan this week. Lets see how it all shakes out before we leap in.
Positions that i like except for the week ahead are... In no special order.
MOS trading around 72.5 maybe the monthlies with the 57.5 strike it gives around 2.7% return for 3 weeks
POT trading near 145 selling the monthlies at the 120 strike it gives a good return of 3.6 plus 25pt of cushion and a recent good earnings report.
AMZN trading around 163 sell the monthlies at the strike of 135 for a return in three weeks of 2% and good cushion.
But again, I am going to be very careful this week..It is hard for me to sit and watch and not jump in and make a trade or two, but I will give it my best.
Good safe trading all
Sunday, October 31, 2010
Friday, October 29, 2010
Friday night update
Well my AMZN puts expired today and I averaged a little over 1% with them. Of course the good news is that it is over 1% in a week. If I can average that per year that is around 60% annual. Again, demonstrating the power of crumbs. We just keep picking up little crumbs and damned if we don't get rich together.
For next week, the ones I am looking at now are listed below, but Sunday will be the real decision day..
NFLX (net-flix) Trading around 174.5
The weeklies look good maybe the 150 strike that gets around 1.5% for the week. Of course what I like is the 25 points of cushion. Do you think NFLX can drop 25 points in a week..neither do I! But on Sunday I will go through my stocks and see what I pick for the coming week.
So another good week for the put sellers.
More on Sunday night.
Good trading all
For next week, the ones I am looking at now are listed below, but Sunday will be the real decision day..
NFLX (net-flix) Trading around 174.5
The weeklies look good maybe the 150 strike that gets around 1.5% for the week. Of course what I like is the 25 points of cushion. Do you think NFLX can drop 25 points in a week..neither do I! But on Sunday I will go through my stocks and see what I pick for the coming week.
So another good week for the put sellers.
More on Sunday night.
Good trading all
Thursday, October 28, 2010
Private letters I have received
Hi traders, Tonight I want to get a little personal and discuss some thoughts from private emails and letters I have received. It becomes obvious that many traders are looking for ways to make money and incorporate some safety into their option trades. Many want to, but have not yet opened an account to trade options.
There is much fear expressed from people that want to trade these options, but between the stigma and rumors there is certainly a misunderstandings and fear that keeps future traders from jumping in and doing it.
My goal here and in my book is to explain and let what is affectionately called 'new-be's' get both a basic understanding of options and a way to trade them and how relatively simple they can be. This is not rocket science. It really is easy and just takes a very little work or (my book) to understand them. Regarding my book, not to burst any bubbles but i make very little from any sales. I make more in any given day trading options than I will make in months of book sales. I sell the book hoping to just make back the cost of having a professional editor and someone to proof read my spelling and grammar. The book is filled with my experience and some humor yet hopefully insightful points. I mention the book hoping that you take a look as it will give you a full history of my trading and ways that you can learn from my mistakes.
Also I am hoping this blog gives some idea of what a professional trader does and goes through daily. I often get asked "How much time does it take to be a professional trader" First of all i hope you do not go through what I did 10 years ago. To lose a million plus dollars and more in 18 months is not fun. It probably builds character but destroys what little brain cells I had.
As I have said in my book and on other blogs, " there was a time when I was getting Industrial size 55 gallon drums of Pepto Bismol delivered to my personal loading dock. Whew, what a time. But it is funny now...I guess...
So my goal is to spare you the anguish and pain of dreading to see the market the next day. 10-- 15 or 100K per day drain out of your account and no end or remedy in sight. So as I said, I want to spare you this charter-building experience.
So follow my trades or buy my book or best of all do both. We will make money together and try our best to avoid the bad times. I will do my best to help you and we will travel this option road together.
Jerry
There is much fear expressed from people that want to trade these options, but between the stigma and rumors there is certainly a misunderstandings and fear that keeps future traders from jumping in and doing it.
My goal here and in my book is to explain and let what is affectionately called 'new-be's' get both a basic understanding of options and a way to trade them and how relatively simple they can be. This is not rocket science. It really is easy and just takes a very little work or (my book) to understand them. Regarding my book, not to burst any bubbles but i make very little from any sales. I make more in any given day trading options than I will make in months of book sales. I sell the book hoping to just make back the cost of having a professional editor and someone to proof read my spelling and grammar. The book is filled with my experience and some humor yet hopefully insightful points. I mention the book hoping that you take a look as it will give you a full history of my trading and ways that you can learn from my mistakes.
Also I am hoping this blog gives some idea of what a professional trader does and goes through daily. I often get asked "How much time does it take to be a professional trader" First of all i hope you do not go through what I did 10 years ago. To lose a million plus dollars and more in 18 months is not fun. It probably builds character but destroys what little brain cells I had.
As I have said in my book and on other blogs, " there was a time when I was getting Industrial size 55 gallon drums of Pepto Bismol delivered to my personal loading dock. Whew, what a time. But it is funny now...I guess...
So my goal is to spare you the anguish and pain of dreading to see the market the next day. 10-- 15 or 100K per day drain out of your account and no end or remedy in sight. So as I said, I want to spare you this charter-building experience.
So follow my trades or buy my book or best of all do both. We will make money together and try our best to avoid the bad times. I will do my best to help you and we will travel this option road together.
Jerry
Trading frustrations
One of the frustrating parts of option trading is dealing with other traders and their over estimation of reality.
An example is as follows.. I have 25 puts for AMZN (Amazon) The puts are for the 150 strike and AMZN is now trading around 166. There is only today and tomorrow left in these puts before they expire. These puts are now selling for between .08 / .10
So the reality is that AMZN will have to fall below 150 for these to have any value, or over 16 points in a day and a half. At this time the put is all extrinsic value and not any intrinsic value. So how it effects me as a trader, is that I have a lot of maintenance funds tied up with these and they should be selling around .01 /.02. I could then buy them and sell another position and make a little more in the last two days of this week.
Of course when I make trades that are over-inflated it is good trading, but when other try the same tactics it is 'greed & unreasonable' lol
The result is that sometimes you just have to either bite the bullet and pay the 'going rate' or as I am doing this week, say, to heck with them and just let them expire tomorrow afternoon.
An example is as follows.. I have 25 puts for AMZN (Amazon) The puts are for the 150 strike and AMZN is now trading around 166. There is only today and tomorrow left in these puts before they expire. These puts are now selling for between .08 / .10
So the reality is that AMZN will have to fall below 150 for these to have any value, or over 16 points in a day and a half. At this time the put is all extrinsic value and not any intrinsic value. So how it effects me as a trader, is that I have a lot of maintenance funds tied up with these and they should be selling around .01 /.02. I could then buy them and sell another position and make a little more in the last two days of this week.
Of course when I make trades that are over-inflated it is good trading, but when other try the same tactics it is 'greed & unreasonable' lol
The result is that sometimes you just have to either bite the bullet and pay the 'going rate' or as I am doing this week, say, to heck with them and just let them expire tomorrow afternoon.
Tuesday, October 26, 2010
position update
G'morning traders.
A quick update on the positions I now hold and my current thoughts.
1. 2 GOOG 520 strike for JAN 2011 GOOG trading around 614.50 now.
I will try to hold for a while as I have a lot of cushion and GOOG
has so much going for it. If held a while it gives an average of 3%
per month ( my goal)
2.AMZN trading around 168
I have 10 of the weeklies at the strike of 155 These are working out nice with 3.5 days to go
I Have 25 of the 150 strike for the weeklies also. These look good with
19 pt of cushion with 3.5 days to go.
NFLX today around 171 and headed up some
I have 30 of the Nov monthlies at the strike of 125. So around 46 pt of cushion and 3.5 weeks to go.
These positions are all making 3% or better per month and going as expected. Goog is down a little today, however, the premium is falling also. That is the beauty of lots of cushion. The time factor starts eating at the premium quickly if the stock doesn't start dropping rapidly.
So, if nothing drastic happens today I will hold these and watch. As you know if things go off track I have no hesitation to close or make a move even if it involves taking a loss.
Good trading all.
Jerry
A quick update on the positions I now hold and my current thoughts.
1. 2 GOOG 520 strike for JAN 2011 GOOG trading around 614.50 now.
I will try to hold for a while as I have a lot of cushion and GOOG
has so much going for it. If held a while it gives an average of 3%
per month ( my goal)
2.AMZN trading around 168
I have 10 of the weeklies at the strike of 155 These are working out nice with 3.5 days to go
I Have 25 of the 150 strike for the weeklies also. These look good with
19 pt of cushion with 3.5 days to go.
NFLX today around 171 and headed up some
I have 30 of the Nov monthlies at the strike of 125. So around 46 pt of cushion and 3.5 weeks to go.
These positions are all making 3% or better per month and going as expected. Goog is down a little today, however, the premium is falling also. That is the beauty of lots of cushion. The time factor starts eating at the premium quickly if the stock doesn't start dropping rapidly.
So, if nothing drastic happens today I will hold these and watch. As you know if things go off track I have no hesitation to close or make a move even if it involves taking a loss.
Good trading all.
Jerry
Monday, October 25, 2010
Some mid- day GOOG puts
I had some money sitting on the side-lines and made an unusual move for my style. I sold 2 puts for GOOG for the Jan 2011 520 strike. This gives me around 98 points of cushion. The return was $1,053. It takes 11,522 maintenance. So this is a return of (1053 div by 11522) = 9.14% return. If held until maturity that is a little better than 3% per month. If you have followed my trading you know that I have a hard time sitting on my hands for nearly 3 months, but I will give it a good try as 3% a month are my long term goals. GOOG with its Android interest should have a long run before much profit taking.
New AMZN positions, closed the AAPL puts
G'morning all,
This morning I made a few option moves with one of my favorite stocks.
With AMZN trading around 171 and 4+ days to go...
1. I sold 20 of the weeklies for AMZN at the strike of 150. Net income of 426. This needed 38,175. of maintenance which = a return of 1.1%
2. I sold 10 of the weeklies for AMZN at the strike of 155 net income of
287. This position required a maintenance of 20,186 = a return of 1.4%
Reasons for the moves...
1. With a little less than 5 days to go and over 21 point of cushion I like this move. Only 1.1 % gain but that is for a week.
2. Also less than 5 days to go but only 16 point of cushion. I lowered my volume to just 10 puts for safety. The gain is better than the 150 strike but the risk go up.
I closed the AAPL puts at a very small profit of $21.
I had opened them for 360 and closed them 341. The position was eating up to much maintenance and my account went up 353 by moving into the AMZN. Plus I have some maintenance left over to use on another position as the week progresses.
This morning I made a few option moves with one of my favorite stocks.
With AMZN trading around 171 and 4+ days to go...
1. I sold 20 of the weeklies for AMZN at the strike of 150. Net income of 426. This needed 38,175. of maintenance which = a return of 1.1%
2. I sold 10 of the weeklies for AMZN at the strike of 155 net income of
287. This position required a maintenance of 20,186 = a return of 1.4%
Reasons for the moves...
1. With a little less than 5 days to go and over 21 point of cushion I like this move. Only 1.1 % gain but that is for a week.
2. Also less than 5 days to go but only 16 point of cushion. I lowered my volume to just 10 puts for safety. The gain is better than the 150 strike but the risk go up.
I closed the AAPL puts at a very small profit of $21.
I had opened them for 360 and closed them 341. The position was eating up to much maintenance and my account went up 353 by moving into the AMZN. Plus I have some maintenance left over to use on another position as the week progresses.
Subscribe to:
Posts (Atom)