Category: Beginners

I’m starting to do this type of trade more often.  The day after earnings are released, when earnings news specific to the underlying equity shouldn’t offer a surprise before my option expires, I like to sell naked puts. That’s what I did with Intel (INTC) today.

Obviously, the premium would have been much better if I had sold the options prior to earnings announcement, but I would have taken on more risk than needed. I’m not saying this is a hard rule for …

Back on February 22nd I entered a limit on Cummins, Inc (CMI) when it was above 53.00.  That order hit just after market open this morning while CMI was trading around $47.75.  I sold two April 45 naked puts (CDMPI) and received $388.50 after commissions. 

Since it has been a few weeks, I’m not sure, but think I found this one in Barron’s.  I charted it back then and saw that 53 was too high for me.  Charting it again today I …

I’ve talked a lot lately about my bad trades, but I am taking a moment to reflect on the good which is most of what I’ve had the past few weeks.  It’s just that one bad trade can beat out a few good trades.  It continues to be a numbers game with my trading model.  I have to make sure I maintain my search for good trades to have premiums that help balance out my losses on positions like NVDA. 

I had …

Had the month lasted one day longer I wouldn’t have had to post that the Dow Jones ($DJI) was beating me for the past 12 months.  I had a $2200+ rally on Friday that made all the difference and put me ahead of the Dow again.  That’s how simple this thing can be.  What a difference a day makes.  The Dow was up to, but once again I’m ahead.  My new 12 month trailing return is +5.76%.  We have a …

If you are going to enter into the world of selling options you have to know your options (pun intended) and the risks that come with each. I love to sell options because I like receiving premiums rather than paying premiums, much like an insurance company.  Option selling strategies can vary greatly.

I’ve done very well with selling time value, mainly with naked put options and sometimes selling call options too.  One of the tricks is to know when to sell which stock options – calls or …

I was down by almost $3200 again today by the end of my lunch break.  That’s when everything changed.  I ended the day up almost $350. 

I sold 2 MRO Feb 50 calls (MROBJ) and received $149.50 after commissions.  This trade was to cover my Feb 50 puts and give me more cushion to the downside.

I sold 2 MRO Feb 45 covered calls (MROBI) and received $368.50 after commissions. This trade was to cover the 200 shares I own already.  MRO …

Kopin Tan had a great line in this week’s Barron’s.
“Like beer bellies and bald spots, a recession is one of those things whose precise beginning is hard to pinpoint – until the sad evidence eventually becomes hard to refute.” 
We have no true way other than guess if we are actually in a recession yet, but we do know the indices are down and most of our accounts show its harsh reality.  The same Barron’s article pointed out that based on data …

Earlier today I mentioned I was leaving a limit order to sell covered calls on my 300 DWA shares.  While DWA was trading at $22.79, my limit order hit and I sold three March 25 DWA covered calls (DWACE) and received $257.75 after commissions. 

I screwed up on DWA a while ago and let emotions get the better of me.  One of the reasons I did so well in 2007 was that I stayed fairly strict about …

When I first started selling options I had a lot of questions about how the taxes worked with it.  At the end of my first year of selling options I asked a neighbor who was a financial advisor how I should account for options that had not expired yet.  He said he’d have to check and get back to me.  At some point after I asked him it dawned on me that until I bought it back or it expired I …