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February 16, 2018

Options Expiration – February 2018

Filed under: Account Summary,Finance - 16 Feb 2018

I had no options remaining to expire today, so I’m giving a short recap of what’s in my account at the end of the week.

– 1 GS March $265 naked put with GS trading at $267.62
– 1 ADI March $85 naked put with ADI trading at $86.09
– 1 XLB March $63 naked put with XLB trading at $60.48
– 1 IWM March $159 naked put with ADI trading at $153.35
– 1 WMT March $105 naked put with WMT trading at $104.78
– 2 TLT March $125 short call with TLT trading at $118.71
– 2 TLT March $128 long call with TLT trading at $118.71
– 1 AAPL April $165 naked put with AAPL trading at $172.43
– 1 NFLX April $235 naked put with NFLX trading at $278.52
– 5 UUP June $23 long puts with UUP trading at $23.29

My account balance is $101.947.28 with $104.676.65 in cash. I think it bottomed around $97,500 +-$500 a week and a half ago at the market’s depth. I didn’t bother noting the exact amount since I knew it would change in either direction very quickly from within days. Earlier this week, I thought about selling a far out of the money naked put on IWM, just for …

February 15, 2018

Rolled AAPL Naked Put to April

Filed under: Finance,Stock Picks - 15 Feb 2018

My AAPL naked put was the only option I had set to expire in February and the timing of AAPL’s move higher worked out well for me. AAPL fell as low as $150.29 intraday on February 9. I thought I had a strong probability of having the option assigned, but the iPhone maker recovered even faster than it fell, at least from $170 to $150 and back. After news hit of Warren Buffet’s increased stake in AAPL, the shares gapped higher today. I was watching when the market opened today (advantage of doing this for a living) and was able to react to AAPL’s price jump while it was still close to the lows of the day. While AAPL was trading at $169.52, I bought to close one AAPL February $165 naked put for $0.17 and at the same time sold one AAPL April $165 naked put for $4.07. I received $388.75 after paying $1.25 in commission for the calendar spread.

I could’ve let the February put expire worthless, but removing the risk was worth $17.62 for me. AAPL closed at $167.38 yesterday and looked like it could easily fall back to $162.50 without breaking its upward trend. Luckily for me, …

February 8, 2018

Rolled NFLX Naked Put to April

Filed under: Finance,Stock Picks - 08 Feb 2018

Remember last week when I didn’t want to spend $43 to close my NFLX naked put? Well, that would’ve been a bargain compared to what I spent today. The good news is that I didn’t make today’s trade out of fear of an option assignment. Instead, I rolled my position higher to take advantage of the volatility that’s spiking this week. While NFLX was trading at $252.68, I bought to close one NFLX March $205 naked put for $1.42 and sold to open one NFLX $235 naked put for $11.62. I received $1,018.74 after paying $1.26 in commission for the diagonal calendar spread.

I received $529.31 when I sold the March $205 put and I paid $142.62 to close it today. That gives me a realized gain of $386.69 in just over three weeks. NFLX was trading at $254.00 when I placed my limit order and thought it might hit tomorrow morning, but then the entire market fell down another large step and the trade went through before the day’s selling was over, i.e. I could’ve made more than I did.

I’ve been eyeing this trade all week and couldn’t wait any longer when I saw the S&P 500 retesting its intraday …

February 1, 2018

Month End Summary – January 2018

Filed under: Account Summary,Finance,Indices - 01 Feb 2018

It feels good to be back in the swing of things and making more trades than I did in most months last year. One drawback to selling options is that you don’t get the big upswings in your account balance when the markets make big moves higher. This lag can be discouraging for those who are new to selling options, but the benefit is that you don’t get the quick account balance drops when the markets drop. The peaks and valleys are smoothed out essentially. While I did have a positive month in January, I was hampered by this lag and the fact that I made more of my trades in the second half of the month and missed out on some gains.

My account ended January with a Net Asset Value (NAV) of $101,128.79 according to Interactive Brokers (IB) after beginning the month with an NAV of $100,000.00 after I withdrew $7,211.56 on January 3. I had a gain of $1,128.79 (~1.13%) on paper for January and had $1,299.86 in realized gains from my three closing trades on my IWM, NFLX, and QQQ naked puts. I received $67.51 in interest ($14.84 more than last month), but no dividends in January since I wasn’t long shares of anything. Quicken reported …

January 30, 2018

Sold XLB Naked Put

Filed under: Finance,Stock Picks - 30 Jan 2018

I placed a limit order for an XLB (Materials Select Sector SPDR ETF) naked put one week ago when XLB was trading at $62.92, but XLB was still coming off lows from a week earlier at that point and the VIX was 3-4 points lower than today. So, when XLB climbed to $64.17, I figured my order wasn’t going to hit. However, things can change quickly. The bulls threw a little fit yesterday afternoon and this morning to knock stocks lower and push the VIX higher.

While XLB was trading at $63.03, I sold one XLB March $63 naked put for $1.35 and received $134.32 after paying $0.68 in commission. My thought process around XLB is that with the tax cuts in place and possibly more infrastructure stimulus on its way, the materials sector should continue to do well or at least not falter much. Since I sold the put at the money, I only have a 2.18% cushion. On the upside, I have a potential gain of 2.18%, 16.66% annualized.

XLB has been on a steady run higher since early November 2016, like most stocks and equity ETFs, which means it could be susceptible to a reversal beyond the 1-2% we’ve …

January 29, 2018

Sold GS Naked Put

Filed under: Finance,Stock Picks - 29 Jan 2018

Barron’s cover story from this weekend was on Goldman Sachs Group ($GS). While I try to read most of the articles in Barron’s every weekend, I rarely read more than half of them. This past weekend I made it through more than usual, including the bullish article on GS. Not every cover story speaks to me, but this one did, and I decided I should consider getting into it today. I figured we’d see a pop higher to start the day based on the article and that’s what happened. I wanted to give the morning price action a little time to show if it would simply turn over quickly while the broader market was in the red or if it might have legs. After about 30 minutes, I saw GS come off its morning highs and thought it would be worth a limit order if it came down further.

While GS was trading at $271.34, I sold one GS March $265 naked put for $5.90 and received $589.31 after paying $0.69 in commission. GS continued to decline to $270.50 within 10 minutes of my order going through before pushing higher again. So, I could’ve made a little more income from the …

January 25, 2018

Option Trades on UUP and TLT

Filed under: Finance,Stock Picks - 25 Jan 2018

The last time I traded UUP I lost almost $279. That was in August 2011 and haven’t thought of the PowerShares DB US Dollar Bullish ETF since then enough to make another trade, until yesterday. I’ve been watching the US dollar lose ground and finally decided I should try to make a profit on it, but without too much risk. I’m happy to trade on nearly any stock or ETF that I think I can make a profit on, but this one means more to me right now. I have a vacation planned for this coming summer to Greece with my dad and son for nearly two weeks and want to hedge the dollar some. My original plan was to buy 10 UUP puts, but this morning the dollar fell another 0.6% and I thought I might have missed the first easy swing. I changed my order to buy only five puts and raised my limit order $0.03. While UUP was trading at $23.26 (on its way back to break-even for the day), I bought to open five UUP June $23 puts for $0.28 and paid $141.86 including $1.86 in commission.

I estimated my original plan to buy 10 puts at $0.25 …

January 24, 2018

Sold IWM Naked Put for March

Filed under: Finance - 24 Jan 2018

My account was void of any index funds and I was looking for another individual stock to sell an option on, but felt I had been waiting too long and opted to come back to the easy trade on an index ETF while I continue to look for individual stocks. QQQ and IWM are usually the best for option premiums thanks to their higher volatility (usually) over S&P 500 ETFs. Since I already have options on AAPL, ADI, and NFLX, I decided to delay selling a new naked put on QQQ and focused on IWM.

While IWM was trading at $159.15, I sold one IWM March $159 naked put for $3.20 and received $319.32 after paying $0.68 in commission. While I usually like to sell farther out of the money, I opted to sell this contract at the money for a few reasons. First, my other options are farther out of the money already and have their own cushion from a loss, so I figured I had room to take more of a risk. Second, I like the risk reward for this contract. IWM can drop another 2.10% before I lose any money and if it stays above $159, I’ll make …

January 19, 2018

Options Expiration – January 2018

Filed under: Finance - 19 Jan 2018

I only had two options left to expire today, one IWM January $148 naked put and one QQQ January $153 naked put. Both are far out of the money and will expire worthless. I’ll have a realized gain of $340.32 on the IWM put and $286.32 on the QQQ put. IWM was trading at $148.59 when I made this trade compared to $158.16 as I write this update midday today. QQQ was trading at $154.28 when I made that the QQQ trade compare to $166.05 midday today. Clearly, I could’ve sold these in the money and made a lot more money, but considering I made these trades the day after my mom died and at the end of a stellar year for stocks, I didn’t want to take a big risk, especially when my head wasn’t fully in the game.

I plan to replace both expired puts with new naked puts soon, but have been waiting for a down day to pull the trigger. I’m afraid I’ll continue to wait for something that won’t come to fruition until prices have pushed even higher and risks have increased even more. I’m not sitting around doing absolutely nothing at least. I did roll …

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