Hi all. Just a note to advise put sellers to use caution with these world events. I am not opening any new positions and I am closing most of my current positions on Monday. I just don't like the unknown and neither does the market. If this escalates to the level that the S. canal is closed...?
So my view is to take any profits and wait and see for a few days to see how this shakes out.
This is not the time to try and out-guess the direction of stocks or options.
Common sense is the way during these events.
Jerry
32 comments:
Hi Jerry,
i agree,it will be prudent to close the postions on monday if middle eastern unrest continues and asian market have a sell off on monday.How was your return percentage wise in 2009,did u achieve above 36% per annum return.
Hey Jerry,
Great blog, is it possible to get your book as a word doc? or pdf?
Thanks, Bill (i also sent you an email)
Another take on this:
Don't Blame Egypt for Today's Sell-Off
http://seekingalpha.com/article/249450-don-t-blame-egypt-for-today-s-sell-off
HI trader Lux
email me3 at .. putman3232@yahoo.com and i can email you a book in word format
thanks
I agree Nicky, many things coming together but the unrest in the Arab world is spooky with oil being one of the main world fears.
This may settle down fast but until I get a direction or some proof that our market can live with this 'unrest' i will avoid it.
Jerry
NFLX feb 170 @ 45cents about 2.5% for 19days tils expiration...although selling puts into this market with that huge extended gap on NFLX scares me
Today's bounce on some of my positions helped alot, especially my Weeklys AAPL (320 and 325) expiring this Friday. Still have 19 and 14 pts cushion on each for next 4 days...still feeling good about it.
HOWEVER...I unloaded DECK -- that's been a dog for me, go out at even money + commissions. I may dump ESI tomorrow, that premium has almost doubled on me, ughh.
In spite of these woes, still up 1.3% this month so far.
some good trades John, gotta have a few bad ones to keep the buyers coming around.
I closed some of mine early today and wish i had kept them for awhile until the bounce. But made a little and can watch the mkt for a day or two to see how it shakes out.Brian, I know what you mean with NFLX. I have not used it for a month or so. But now that it wants to settle back to normal i might jump on.
New to the blog. Jerry I really enojoyed the book and the simple trading rules.
still holding only FCX Feb 90 - stock splitting 2:1 tomorrow - hopefully this won't be interesting
Jerry, im new to your strategy but i have found little to no trades that meet your criteria unless im willing to buy closer in strike like maybe 15% OTM.....and on some trades like NFLX above that i mentioned i am too nervous knowing if run will continue so is there any downside to selling in the money covered calls on momentum stocks like NFLX where i can sell Feb(monthly) 200 calls for 16.25 and get $3 time value of out them on $9688 margin being long the 100shares NFLX for a 3.1% return with $16 price protection on NFLX to my short call strike that expires in 19days....if nflx does move lower i can roll my short strike down to another strike with more time premium and my existing cost basis is $197 from the short 200call sold ? i would only look at doing this on a company with big momentum like NFLX taking on the risk of downside on a covered call so i figured at least buying the far in the money protected the downside for my to 197 ?
i did put in a put credit spread on inverse smallcap bear ETF TZA as the premium/vol are high i can get good premium and got .31premium per 14/13 spread and with the VIX hammered today I am happy taking that yield....is stock gets put to me down here, ill sell calls against it because the monthly premiums are so big....i figure its a good downside play protection for me....mkt breaks down my put credit spread expires worthless....it mkt moves higher i get put TZA down here that i can sell usually .70-1.00 just out of the money calls on it which if put to me at $14 would be 5-8% return a month on the position...also the out the money spreads are tight on this name
Hi Brian, The covered-call is a strategy that I use often when having trouble finding good trades. You might look at apple for the same strategy. It isn't as volatile as NFLX. Of course the price is higher so that limits the #..
You might want to look back a few post ago where I listed the stocks i use. Others have listed their stocks also, that gives you a good list to search out some decent trades. As you said, for safety i usually sell ITM calls when using this strategy.
When selling puts, I sometime break 20% rule but only with higher priced stocks. An example is with aapl around 340 i might MIGHT sell a put at the 320 strike. That is only 6% but 20 points of cush. When looking at a possible position like that one rule i do follow is to not take over 6% profit. If you get over that then move down a strike or two. I also would not do that with a stock like NFLX. It is just volatile. I hate to admit to moving within the 20% factor but common sense when evaluating a lot of cushion and a shorter time period combined with a good stock is the key word.
I have not done any ETF's, so I'm not up on those positions
Jerry
Sold UYG FEB $63 puts yesterday for .67, a little risky, today the bid/ask is down to .30/.36, with earnings out of the way I think it's safe to bet on financials, I been having great luck with UYG.
Can't resist playing UYG, sold Mar $50 puts for .20, with UYG at almost $72, this seems like a safe bet.
Brian, side note from FL you should have come it was a blast. We put on three main trades POT P/L open today 7069.50 NFLX P/L open 3335.00 and PCLN P/L open 144.0 this one is a calender with the long at Feb.
Great time and FWIW we did not spend 5 min. talking about pinning.
I Still have TCK.
46 Strike / Trading at 63
Premium is at .08 to get out. This would net a 2.8% profit BUT the commissions takes it to 1.8%. Man the commissions get ya. I was hoping to get the premium to .05 to get 50% more profit out of my commissions since ToS doesn't charge for .05 and lower put buys.
The only thing is that the earnings are at the end of today. And as Jerry says when you gut is telling you something, listen to it. I will probably get out just to be safe.
Fulgore - if you think you need to exit the trade; exit with a 1% profit versus a 10% loss.
Good luck.
Well I got out of the TCK
With the commissions included I made out with a 2.2% profit, not bad for 8 days.
I picked up a put vertical spread with FSLR.
140 Sell
135 Buy
Trading - 164.43 at time of trade
Cushion - 15%
Days - 16 left
Premium = .22
Uptrending Chart
Earnings out on the 17th. lots of time left
I felt with 16 days left 15% cushion would be ok. That and i will get out before earnings are announced.
one thing to keep in mind on something like FSLR that move a lot is that out of money options will carry time value all the way into earnings as those events create an opportunity for them to potentially be in the money....so they might not decay like OTM options normally would unless the stock really moves farther away from your short strike during the time you are in the position.....i guess we will see
Looking to open some new AAPL weeklys tomorrow for next week's expiration. I'm kind of hoping AAPL dips tomorrow to get a better premium and a lower strike price. I'd like to sell the 320 or lower, for 20-25 pts of cushion for the next week.
Just sold the 335 puts for tomorrow's expiration picked up .22 98 point cushion) Breaks the rule but I'm 5 for 5 doing this. You never know though.
which stock, bloguser?
aapl
Hi all. I get home tomorrow after a 3 week road trip. I will spend the weekend trying to find some good trades and then spilling my guts to all interested.
Whew. been a long trip with over 3000 miles covered and talking to many traders around the west.
I will relate some stories on Saurday.
Jerry
Jerry,
Have you ever considered starting your own hedge fund? Any idea as to what it takes, pros and cons, etc.?
FSLR is taking a hit due to Egypt and Oil prices going up. (please let me know if my assumption is wrong here).
Trading at 158.40 - Down 3.77 today
my vertical is 140 / 135
I will have to keep an eye on this. My premium has not doubled and i still have 18 points of cushion. This goes to show you how world events are affecting the market. Also they were moved from buy to hold.
With the market having a great run, and everybody talking about a correction, I bought BGU Mar $76 puts for $3, when I see a little profit I'm going to sell these, I learned my lesson on the buying side of options from holding on to MAR $5 Citi calls, when Citi went over $5 I was up 30% on the calls and instead of selling, I held on thinking Citi was headed to $6, now I'm holding these C calls which are trading for .10, they will probably expire worthless.
Account returned 2.7% past two weeks using Crumb Method. Remaining positions will provide another 1.2% assuming expiration. This includes AAPL Weeklys expiring next week, so may consider rolling those positions out another week depending on AAPL's movement next week. Have some APPL Weeklys 320 and 325, with 26 and 21 pts cushion respectively for next 7 days.
Hope everyone has a safe and blessed weekend.
...and keep the people of Egypt in your thoughts.
Fulgore, on a rational day, an increase in oil prices makes alternative energy more attractive and its price should increase as well.
Fslr has made a strong run in a short time. Its price dropped significantly AFTER last two earning reports - may be some FSLR owners learned the lesson??
Market is not rational most of the times...
Just my 2 cents.
KJ; I get asked ever so often if I would do the investing for others. Not really sure of the legalities of setting up a fund. I now do investing for family and friends so I have a mini fund of sorts. It would be hard to find plays when you are trying to do several million or more a month. Yikes, it would certainly entail diversity.... But it is an idea I have toyed with some? I imagine it would be quite a pain to set up. But thanks for the thought
Hannah, i agree, usually the solars are inverse to oil.. We will see over the long haul if that pans out this time.
Jerry
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