Since I made the decision to go back to my old trading model of splitting my account over the two front month options expiries I’ve increased my exposure a little each week.  I still am not fully invested, but I’m almost there now.  That’s going to change substantially in a few days when March expiration comes and goes.  As of this moment all of my March options are trading out of the money and set to expire worthless.  With that in mind I need to add some new positions to keep my exposure high enough to keep up with the markets if not better.

I’ve considered SPY naked puts, but keep thinking we’ll have a pull back.  That’s kept me out of some investments and put me in a place where I’m starting to trail the markets again.  I feel I’m finally starting to capitulate and accepting more risk.  I still expect a pull back in the markets in the not too distant future and plan to use that opportunity to get heavily invested since I don’t think we’ll have a ferocious fall for a while still.

I mentioned a couple of weeks ago that I had a limit order in place for …

I’ve been collecting a list of dividend paying stocks and ETFs for the past few months as I broaden my scope not only for my clients, but for my own personal investing too.  I’ve mentioned my draw towards dividend investing a couple of times over the past months and thought by posting my dividend stocks list some of you could help me add some that I might be missing that are worth a look.

Most of the stocks on this list came from articles I’ve read on other sites and Barron’s newspaper.  This screen shot is from my IB account and actually came from last week when I first started putting this post together and then I got distracted with making some trades. 

The obvious benefit from selling options on dividend paying stocks is that you get an extra payment built in to your planned gains when you are long the stock.  You don’t get that benefit when your only exposure is through naked puts.  Dividend stocks can give a little more support in a down market if it is believed the dividends will remain untouched or continue to grow.  I don’t pay as much attention to the ex-dividend date when selling options as some traders do.  I figure if I’m looking out …

I charted the S&P 500 ($SPX) after the markets closed on Friday, March 12, 2010, when the SPX closed at 1,149.99 for the week.
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I decided to go with a monthly chart this weekend after having an email conversation with a reader who had a question about the 200 month moving average from a chart I posted last July.  Back then the SPX was fighting to get back above its 200 month moving average.  This week was pretty good timing to come back to look at the past five years of monthly prices because the 10, 100 and 200 month moving averages really stand out.

For the past six months the SPX has been sandwiched between the 100 and 200 month moving averages.  Friday’s intraday high marked a new 2010 high, but the resistance from the 100 month moving average could prove to be a rally stopper.  This level, near 1,150, is going to be crucial to watch.  I’m not saying the SPX can’t get above this range, but before you jump in with both feet it might be worth waiting …

The stock market can make you laugh at yourself sometimes.  UCO is playing its roll as the comedian today.  In my post on Monday I mentioned that I was trying to work a calendar spread on UCO.  I couldn’t get the limit order I wanted to work for me on a combined order so I broke it down and legged in with a single purchase and then waited out the sell order for the second leg.  With the VIX down option premiums are down.  That never lasts forever, so I decided to mix up my usual trading routine and open a calendar spread on UCO for a debit with two expectations.  I expect the volatility portion of the option price to go up before my long options expire and I expect oil will come down some from its current levels, maybe for a few round trips before October.

While UCO was trading at $13.03 this morning my limit order hit and I bought to open 10 UCO October 12 puts at $1.70 each and paid $1,707.14 with commissions.  Originally I was trying to get my limit order to hit for a $1.15 debit for the combined order, but it only looked like $1.20 would work and I …

Occasionally when the markets are slow, like they’ve been recently, I mess around with a penny stock trade to try to make a little extra cash.  The risks of complete loss are fairly high with these stocks compared to my normal trades so I don’t “play” with much.  This is much more a game to play than a true investing strategy.  I don’t have a true penny stock trading system. So, I’m not suggesting anyone else follow my lead on these trades, but since I like to post all my trades I’m following suit here, but don’t confuse this with a how to guide.  I don’t do much if any research on the companies.  I typically just use the chart and try to pick usual lows and highs and use those as my entry and exit points until I get bored, it stops working or I lose.

I started doing this in the mid-90s when I was brokering electronic components.  One of our vendors was All American Semiconductor (Now listed on the pink sheets as SEMIQ.PK).  At the time it wavered between $5 and $10 and moved along with the price of DRAM which we tracked carefully.  I’d try to get in to make …

My CSCO position started with a mistake.  While getting used to the platform after switching my account to IB I mistakenly sold calls instead of a put, as if I hadn’t made hundreds of trades for years and didn’t know what I was doing.  I didn’t panic.  Instead of closing out the short calls on a stock would go higher I sold in the money puts at a strike $2 higher than the calls.  This gave me a cushion to make a $200 profit if CSCO stayed between $23.00-25.00 through expiration. 

CSCO made a steady climb since I added my second leg, but in a reasonable enough fashion that I knew I could manage my position easily enough.  I thought about closing it last week to pocket $100 profit and move on, but thought I had a good chance to make it to expiration without having to close it early.  That’s about the time CSCO started a strong rally.  Today it went up more than $1.00 and I decided that I missed my chance for a profit and had to cut my losses while they were small.  While CSCO was trading at $26.02 I bought to close three CSCO March 25 naked …

I charted the Dow Jones Industrial Average ($DJIA) after the markets closed on Friday, March 3, 2010 when the Dow finished the week at 10,566.20.
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In my S&P 500 chart last weekend I wrote that Monday would be a great indicator for how the markets would likely follow through.  Monday was a big day and I proved to be correct in my prediction with how the markets behaved for the rest of the week.  I have a hard time not liking this Dow Jones chart below too.  It has a lot of bullish indicators working in its favor.  The first is that it broke out above its recent trend line of higher lows.  I’d like to see a test on this same trend line I drew with it now acting as support.  If we can get that on Monday or Tuesday I’ll be more confident that it will hold for longer.  Before going too far to the bullish side I want to see that this line holds and Friday wasn’t …

Yesterday afternoon I place a few limit orders late in the trading day for new naked puts on three different underlying stocks and ETFs - UWM, ITRI and JPM.  All of them were sitting at levels that I would have been comfortable selling the options, but I wanted to try for a little extra.  I don’t know if it was a touch of greed, caution or an attempt at patience.  Anyway, it backfired on me as all three started off higher today and I missed what would have been good trades yesterday.  I was eyeing UWM due to the good premiums and thought the chart (yesterday) showed a good entry point if only it would pull back a touch.  ITRI was written up in this week’s Barron’s as a good pick (I agree) and I thought the risk/reward was worth it for yesterday’s stock price and option premiums, but now ITRI is a little higher than I’d like to work with for an entry point with lower premiums.  I left my orders in on those two through the end of this week.

JPM did me a favor and although it started off high, it came rolled over a little and moved below yesterday afternoon’s …

I’m pretty happy with how February worked out for me, especially considering that I’m not fully invested still.   I finished February with a combined balance of $103,076.06 ($91,897.17 with IBKR and $11,178.89 with AMTD) which is up from my January finishing balance of $98,663.75.  $1,500 of the increase is from the deposit I made on February 8th and $2,912.31 is from growth.  I’m 82.03% invested overall and of my equity allocation (aka my IBKR account) 79.84% is in use, meaning I have over 20% of my IBKR account in cash. 

As I pointed out in my S&P 500 chart a couple of days ago, we got an early technical indicator that it was time to invest heavily again in the short term.  With that in mind I increased my put selling and it has paid off so far.  I had to slow it down the week before options expiration so I could push more of my option expirations to the next month out and now I’m trying to do some more specific stock picking to keep my options weighted close to 50% each for the two forward months.  I’m …