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December 1, 2015

End of the Month Summary – November 2015

Filed under: Account Summary,Finance,Indices - 01 Dec 2015

Even with the S&P 500 finishing November almost dead flat, I had another great month.  General time decay on my options, especially on TLT, helped my account do so well in addition to small and mid-cap stocks outperforming larger stocks.  I’m up over 18% for the year and have to start planning to lighten up on some exposure for my annual profit taking and resetting to $100,000 in this account.  However, I don’t want to cut any positions too soon with a possible Santa rally coming over the next few weeks.

I ended November with a Net Liquidation Value (NLV) of $118,231.16 and a Net Asset Value (NAV) of $118,080.88 according to Interactive Brokers (IB) after finishing October with an NLV of $115,009.78.  That gave me a gain of $3,221.38 (~0.028%) on paper for November and a realized gain for the month of $2,120.13 on six closing trades (including two option assignments).  The realized gain came from 10 TLT November $125 naked calls, one DIS covered call assignment and forced sale of 100 shares (this $200.99 net gain includes the premium from original put assignment), one DIS November $100 put that expired worthless, three IWM November $118 covered calls that expired worthless, and two FEZ puts that were assigned (these put premiums …

November 30, 2015

Sold TLT February Naked Calls

Filed under: Finance,Stock Picks - 30 Nov 2015

I’ve been trying to sell more TLT naked calls for more than a week, but my limit orders wouldn’t hit before they expired.  I decided to make another run at it today while TLT was up a little for the day again.  While TLT was trading at $121.21, I sold 10 TLT February $124 naked calls for $1.41 each and received $1,405.74 after paying $4.26 in commission.  Until I looked the week before Thanksgiving, I was blocked from selling another leg of 10 TLT naked calls due to margin constraints.  I looked again after my balance pushed above $117,000 and saw I was able to sell more calls.  I don’t know when the door opened for me again since I wasn’t checking on a regular basis, but I’m glad I did so that I could begin working on another good year in 2016.

I still have 10 TLT December $126 naked calls that are trading around $0.16 now, giving me a paper profit of $1,294.  I have a limit order to buy these back for a dime if the price drops a little more in the next two weeks.  If TLT pushed much higher and stocks drop, I could see a …

November 24, 2015

Sold DIS January Naked Put

Filed under: Finance,Stock Picks - 24 Nov 2015

One of the advantages of following just a few stocks closely is that you get to know their behavior.  While I don’t claim to be able to forecast every move that DIS makes, certain set-ups do create fairly predictable price movements.  I mentioned in my last update that I was waiting for DIS to drop back to its 10-day moving average.  It hit new highs yesterday morning after touching its trend line of higher highs, but then faltered.  This morning, DIS fell below its 10-day moving average by $0.08 before recovering.  I should’ve had a limit order in place waiting for the drop, but didn’t.  I hesitated so I could see if DIS fell all of the way to its 20-day moving average before recovering.  While today might not be the near-term bottom, I opted to move forward with my trade while DIS was down more than $2.00 from its intraday high yesterday.

While DIS was trading at $118.09, I sold one DIS January $115 naked put for $3.00 and received $299.20 after paying $0.80 in commission.  Deciding to sell another DIS put was easy.  I’m still bullish on DIS over the next couple of years.  I considered selling the put in …

November 20, 2015

Options Expiration – November 2015

Filed under: Finance,Stock Picks - 20 Nov 2015

It’s weird to think January options expiration is only eight weeks away.  Before that, we had November’s expiration today.  I came into today with four different options expiring, two on DIS, one on IWM and one on FEZ.

I said I wouldn’t regret my DIS covered call two months ago at $110 if it was assigned, but I didn’t really think DIS would race to $120 by today (from $101.73 then).  It did and I’ll be assigned my one DIS November $110 covered call, which will force me to sell my 100 shares of DIS.  I’ll have a realized gain of $201.20 from the first naked put assignment and this covered call assignment even though I’m selling the shares for $5 less than I paid.  This realized gain doesn’t include the DIS October $95 naked put profit of $220.48 I took when I rolled the strike up to the DIS November $100 put.  The DIS November $100 naked put will expire worthless today and give me a realized gain of $358.90 on top of my other DIS profits.

All of these options added together makes for a profitable series of trades for me and I’m glad I didn’t panic when DIS fell …

November 6, 2015

Sold TLT January Naked Calls

Filed under: Finance,Stock Picks - 06 Nov 2015

I’ve been waiting to sell January naked calls on TLT until after I closed out my November calls.  Finally, at the opening bell, while TLT was trading at $119.48, my long-standing limit order hit and I bought to close 10 TLT November $125 naked calls for $0.10 and paid $104.22 including $4.22 in commission.  I could’ve bought these calls for $0.04 later in the morning, but I didn’t think to change my limit order pre-market and somebody got a deal on the other side.  I accomplished my goal though and made a great profit as today’s closing trade gave me a realized gain of $1,141.52.

I’m trying to stay on the path of selling 10 TLT calls per month, always two months out.  This plan leaves me with two lots of calls, one at the closest monthly expiration and the second at the next month out.  After I sell new calls, I enter a limit order at a dime to close them out, good-til-cancelled.  Once the closing order hits, I sell new calls and repeat the process.

Just because that’s the plan doesn’t mean I have stuck to it each month.  Some months, my limit order to close the position hits and …

November 2, 2015

End of the Month Summary – October 2015

Filed under: Account Summary,Finance,Indices - 02 Nov 2015

Like every bull invested in the stock market, I had a fantastic month in October.  It was hard not to have a good month when stocks had their best month out of the past four years with the S&P 500 adding 8%.  I was able to beat the large-cap index again in October because I am still over-invested and also gained from my naked calls on TLT.  The trick now is when to pull back on the reigns and be happy with a gain of more than 15% for the year.  I’m killing the major indexes’ returns for the past year and the year-to-date, but could always make more, assuming I don’t blow it.

I ended October with a Net Liquidation Value (NLV) of $115,009.78 and a Net Asset Value (NAV) of $115,047.65 according to Interactive Brokers (IB) after finishing September with an NLV of $105,054.44.  That gave me a gain of $9,955.34 (~9.48%) on paper for October and a realized gain for the month of $897.27 on only one closing trade.  The realized gain came from my 10 TLT October $125 naked calls and $97.27 in dividends from my IWM position.  Quicken reported that I have an account value of $115,047.66, a penny more than IB shows, but I left it there …

October 16, 2015

Current Positions – October 16, 2015

Filed under: Account Summary,Finance - 16 Oct 2015

I didn’t have any options remaining for October by the time today’s expiration rolled around, so I’m taking the opportunity to give an update on my current positions.

My account value is up to $112,278.78.  I have $26,990.78 in cash, which means I have roughly $32,500 in naked puts that I can’t cover with cash on hand.  My DIS $100 put looks safer every day, while my DIS $110 covered call looks like it is on a path to be assigned next month.  If DIS plays out like I expect and I close my SPY March ’16 $195 put, I’ll have more than enough cash to cover everything else if it’s all assigned.

That sounds nice and easy, but I doubt I’ll go the next month without making more adjustments.  I like taking these snapshot views to get a feel for where I am to help me decide if I need to make changes sooner than later.  For now, I think I’m doing fine with what I have.  I’ll keep watching to see where I think I can make more money next.

Time Value

or Stock Price 

DIS Nov20’15 100 PUT

DIS Nov20’15 110 CALL

IWM Nov20’15 118 CALLS

TLT Nov20’15 125 …

October 8, 2015

Rolled TLT Naked Calls Out and Up

Filed under: Finance,Stock Picks - 08 Oct 2015

As I mentioned the other day, I reached my limit for selling naked calls on TLT.  So, I had to close some of my current short calls to open up margin.  While TLT was trading at $122.54, I bought to close 10 TLT October $125 naked calls for $0.19 and paid $196.07 including $6.07 in commission.  I brought in $1,013.89 when I sold these calls a month ago.  Buying them back today gave me a realized gain of $817.82.

I could’ve waited to let these calls expire worthless in a week and a half, but I wanted to sell new December calls while the premiums were elevated.  I was away from my office when my first order hit, so TLT was able to fall $0.50 between my orders trading and I missed out on a few bucks.  While TLT was trading at $122.04, I sold 10 TLT December $125 naked calls for $1.46 each and received $1,453.89 after paying $6.11 in commission.

I might have been able to do better on the net intake if I had made the trade a few days ago, but I’m not really sure since I didn’t log what each premium was trading for then.  The October calls’ …

October 6, 2015

Sold SPY & MDY December Covered Calls

Filed under: Finance,Stock Picks - 06 Oct 2015

I’ve enjoyed the rally over the past week and the fact that my account balance is back to within about 2% of my highs of the year.  Since we’ve just had a strong multi-day bounce off the recent lows, I figured that we didn’t have too much more upside in the immediate future.  I started looking for a moment when stocks were starting to sputter and saw it this morning.  I think the upside is fairly limited for the next couple of months and I decided today was a good day to sell covered calls on more of my positions.  If I’m assigned, my account balance will be at new highs for the year and I’ll be able to start over with a fresh outlook.

I already sold covered calls on my DIS and IWM shares and wanted to bring in more cash for my SPY and MDY shares.  I started with MDY since I was more confident with my decision.  While MDY was trading at $257.54 ($0.11 below the high of the day), I sold one MDY December $270 covered call for $2.30 and received $229.75 after paying $0.25 in commission.  I knew I didn’t want to go out any further than December …

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