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October 18, 2017

Sold November IWM and QQQ Naked Puts

Filed under: Finance - 18 Oct 2017

My three options set to expire in October are all out of the money (two are far out of the money and one is close to the money) and I really should’ve traded these two earlier to roll them higher, but I haven’t put the focus needed on my own account much lately. That brought me to today, three days from expiration with a bunch of unused cash on the sidelines. Since these October naked puts are so far out of the money, I opted to leave them alone and will let them expire worthless on Friday. In the early afternoon, while QQQ was trading at $149.08, I sold one QQQ November $149 naked put for $1.90 and received $189.32 after paying $0.68 in commission. I can make an annualized return of 14.87% on this QQQ put, but QQQ can’t lose more than 1.34% before I take a loss.

Just a few minutes later, my other limit order hit. While IWM was trading at $149.70, I sold one IWM November $149 naked put for $1.70 and received $169.32 after paying $0.68 in commission. I can make an annualized gain of 13.27% on my IWM put, but only have a cushion of …

October 7, 2017

SPY Chart Forecasts a Drop

Filed under: Finance,Indices,Stock Charts - 07 Oct 2017

The chart below shows the daily prices for the past year on SPY, the SPDR ETF that tracks the S&P 500 Index, after closing the week at $254.37, on October 6, 2017.

SPY has had an incredibly boring and strong 12 months, recording one of the lowest periods of volatility in the history of the S&P 500. Two technical indicators are predicting the large cap ETF is due to take a breather. Before I sound too much like an alarmist, a “breather” is much different than calling for the beginning of a bear market or even a full 10% correction. While SPY could fall into a correction or worse, it’s too early to tell and the fundamentals don’t appear to be ready to trigger a bear market.

The first technical indicator is more subjective than the second one. I drew the trend lines of higher highs and higher lows in black lines on this chart. The lower trend line has provided support to every dip since December without one exception. For now, we don’t …

October 2, 2017

End of the Month Summary – September 2017

Filed under: Finance - 02 Oct 2017

Like most investors who had a bullish tilt to their accounts, I had a good September, but could’ve done better if I had been fully invested. The Dow gained 2.08% in September and the S&P 500 gained 1.93%. I made some trades, but kept my risk level low, as I have done for most of this year.

My account ended September with a Net Asset Value (NAV) of $104,502.82 according to Interactive Brokers (IB) after finishing August with an NAV of $103,379.86. I had a gain of $1,122.96 (~1.09%) on paper for September and had $1,066.64 in realized gains from my four closing trades on my IWM, MDY, XLF, and ADI naked puts. I received $53.52 in interest, but no dividends in September since I’m not long shares of anything yet. Quicken reported that I have an account value of $104,453.78, which is the same as what IB says I have after adding in the $49.02 in accrued interest that IB is crediting for me.

I’m 79.06% invested in this account, 5.82 percentage points below the end of August. That change is basically from not replacing my XLF naked puts. I still have naked puts on AAPL (close to break-even not counting time value), ADI, IWM, MDY, and QQQ (which are all …

September 15, 2017

Options Expiration – September 2017

Filed under: Account Summary,Finance,Stock Picks - 15 Sep 2017

Short and sweet today – I only had one position left to expire today, two XLF September $24 naked puts. XLF is trading around $24.73 as I write this post mid-afternoon. Too bad I didn’t sell more than two contracts. I’ll walk away with a realized gain of $145.61 as these puts expire worthless.

Late last week XLF traded as low as $23.80 and I planned to re-write $24 strike naked puts. Now, the November $25 puts are showing a bid/ask of $0.71/0.73. I’m tempted to sell a couple of these new puts, but will assess next week and decide if I can find something better. I have too much cash not being put to work right now, so I’ll have to do something to increase my gains for the year.

September 14, 2017

Rolled ADI Naked Put to December

Filed under: Finance,Stock Picks - 14 Sep 2017

My September ADI put was nearly worthless and with option expiration Friday being tomorrow, I decided to go ahead and roll my naked put to December and start over with it. While ADI was trading at $82.91, I sold bought to close my one ADI September $80 naked put for $0.02 and paid $2.29 including $0.29 in commission. At the same time, I sold to open one ADI December $80 naked put for $2.67 and received $266.70 after paying $0.30 in commission.

ADI can drop 6.73% and I’ll still take a full profit. As long as it stays above $80, I’ll earn 3.45% (13.48% annualized) based on the money I should keep in reserves in case of an assignment.

I received $284.30 from the sale of the September put when I sold it in July, which means I have a realized gain of $282.01 after paying to close it today. I didn’t have to buy back my September contract, but for only $2.30 it was worth it to avoid the risk of the market taking a nose dive while I have two contracts at the $80 strike. I never used to buy puts that were out of the money the week of …

September 12, 2017

Rolled MDY Naked Put from September to December

Filed under: Finance - 12 Sep 2017

Before I get to today’s trades, let me know how many of you watched the iPhone 8 and iPhone X announcements today and if you think the sales will be as strong as expected. I’m still short an AAPL October $160 put and plan to let it run for a few more weeks, if not all the way to expiration. I’ll probably be enough of a sucker to buy the iPhone X too. (Who can resist poop animojis?) I’ve had my iPhone 6 since January 2015 and would like a better camera for the vacation I’m planning with my son to Greece next summer. I don’t need it. Nobody does. But I’d like to have it and my son would be content with getting an upgrade to my current iPhone 6. My iPhone 6 still works great and I think I could keep my next phone for closer to four years instead of just shy of three years. The iPhone X won’t be available to order for another month and a half, so I have time to make up my mind. If the market is good over the next six weeks or at least if I trade well, I’ll be …

September 11, 2017

Closed IWM September Naked Put

Filed under: Finance - 11 Sep 2017

The order I placed last week to close my IWM September naked put hit this morning. I placed the order to eke out a few dollars profit, but ended up doing better as IWM gapped higher at the open. While IWM was trading at $140.39, I bought to close one IWM September $142 naked put for $1.90 and paid $191.09 including $1.09 in commission. My limit order was to buy it back for $2.35, but I pulled in an extra $45 to give me a realized gain of $50.23. I left $0.29 in time value in the contract and could’ve done better if I waited, but am happy to be out of it with a profit.

Since I sold a replacement for this put last week, I opted not to add more exposure yet. I have three other September puts that need to expire before I add much more risk. My XLF puts are safe, but ADI can reverse in the blink of an eye and my MDY naked put is still in the money, albeit with a paper profit. I’m waiting for the November contracts to become available for ADI and MDY before I re-write these contracts. XLF has November …

September 6, 2017

Sold IWM October Naked Put

Filed under: Finance,Stock Picks - 06 Sep 2017

I was focused on my other taxable account today, but was doing my research on Interactive Brokers’ platform, where keep this account. When I decided on my trade, I made it in this account I blog about instead of my TD Ameritrade account. Luckily, I wasn’t overly allocated to small caps in the My Trader’s Journal account before the trade, so I kept the trade in place and didn’t try to make a quick exit/reversal.

While IWM was trading at $139.56, I sold one IWM October $137 naked put and received $187.41 after paying $1.59 in commission. It’s a relatively small premium, but the contract expires in about six and a half weeks from when I sold it. The short duration pushes my annualized gain potential to 11.14% with a 3.18% cushion before I take a loss.

This trade pulls my account up to being 97.95% invested with three positions set to expire in seven trading days from now. I might close my MDY naked put this week and roll it out to October and at a lower strike. I’d rather sell the November contract, but it’s not available yet. My XLF naked puts should expire worthless, but as week as XLF …

September 1, 2017

End of the Month Summary – August 2017

Filed under: Account Summary,Finance,Indices - 01 Sep 2017

I pulled out a slight gain in August. The Dow only gained 0.26% and the S&P 500 only edged up 0.05%. I took some risk off as my August options expired and haven’t replaced everything yet. I missed a good opportunity after the short-lived scare from North Korea’s missile launch over Japan and now don’t feel overly bullish enough to take a big risk. I need to sell some out of the money puts at a minimum to keep some cash flow coming in.

My account ended August with a Net Asset Value (NAV) of $103,379.86 according to Interactive Brokers (IB) after finishing July with an NAV of $102,994.78. I had a gain of $385.08 (~0.04%) on paper for August and had $1,020.42 in realized gains from my three closing trades on my WMT, DIS, and QQQ naked puts. I received $52.64 in interest, but no dividends in August since I’m not long shares of anything yet. Quicken reported that I have an account value of $103,327.84, which is the same as what IB says I have after adding in the $52.02 in accrued interest that IB is crediting for me.

I’m 84.88% invested in this account, 40.36 percentage points below the end of July. Much of that change came from the …

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