Keeping track of things is getting a bit messy so here's my first attempt:
PCX - 142.53
July 125 - 8.40 - .75 = 7.65
Aug 125 - 8.70
(Current break even at 126.21)
DRYS - 84.25
Jul 90 - 5.50 - 0 = 0
Aug 85 - 3
(Current break even at 75.75)
Thursday, July 31, 2008
Tuesday, July 29, 2008
HANS Pummeling
What a beating! I broke my rules and now paying for them. I bought HANS because they were fetching 9% returns on the month out calls. I got even greedier by holding this stock hoping I could sell the calls higher on any price movement up. Of course the stock tanks and now I am stuck with it. Well, now my strategy is to simply keep selling calls until I can average my loss down to $0 (Provided the stock stays relatively flat or goes up). So heres the breakdown of events:
2008-06-24 Buy HANS @ 32.41
2008-06-26 Sell July $30 Calls .90
2008-07-22 Sell Aug $30 Calls .95
2008-08-18 Sell Sep $30 Calls 2.30
Current break even price: 28.26
Notes: As soon as my break even price drops below 30, I will be selling the $25 calls (unless I get greedy again)!
2008-06-24 Buy HANS @ 32.41
2008-06-26 Sell July $30 Calls .90
2008-07-22 Sell Aug $30 Calls .95
2008-08-18 Sell Sep $30 Calls 2.30
Current break even price: 28.26
Notes: As soon as my break even price drops below 30, I will be selling the $25 calls (unless I get greedy again)!
Sunday, June 22, 2008
June Results
RIG 158.15 - 155 - 9.10 = 5.7%
DRYS 92.50 - 90 - 11.00 = 11%
AMAT 19.75 - 20 - .80 = 5.3%
POT 202.98 - 200 - 15.50 = 6.2%
DRYS 92.50 - 90 - 11.00 = 11%
AMAT 19.75 - 20 - .80 = 5.3%
POT 202.98 - 200 - 15.50 = 6.2%
Wednesday, April 30, 2008
Roth IRA
I have a Roth IRA that I am doing nothing with. It has only $1164 and it is difficult to get motivated to play with this account.
2008-04-30 Sold 2 AMD June Puts for $.40 – I should make $80 provided AMD does not drop below 6, and should not lose money provided AMD does not drop below $5.60
2008-05-16 Bought 2 AMD June Puts for $.07 - I was planning on waiting till these expired in June but they dropped so much so quickly that making .07 ($14, 1%) more for another month did not make sense. So I made $66 - $16(commissions) = $50,4.3% in 2 weeks
2008-05-20 Bought 100 AMD for $7.16 - I was planning on immediately selling the call, but I got greedy hoping the stock would go up, and then it dropped, so now Im stuck holding the stock
2008-06-05 Sold 1 AMD June Call for $.80 (Jul 7) - Hopefully I can make $64 here
2008-07-01 Sold 1 AMD July Put for $.55 (Jul 6) - make $110
2008-07-21 Buy 100 AMD for $6.00 - A result of an assigned Put that I did not want
2008-08-21 Sold 2 AMD Oct Call for .60 - make $120
2009-05-12 Sold 2 AMD June Call for .30 - make $60
2009-09-15 Sold 2 AMD Oct Call for .37 - make $74
2009-11-19 Sold 200 AMD for 6.79 - make $42
2010-02-10 Buy 100 ITMN for 15.60 - lose $310
2010-02-10 Sold 1 ITMN Mar Call for 5.90 - make $590 (actually $280 due to above)
2010-05-22 Exp STEC Call for .43 - make $34
Current Value: $2006; Current Gain: 2.2%; Goal: $1469; Needed: $26
2008-04-30 Sold 2 AMD June Puts for $.40 – I should make $80 provided AMD does not drop below 6, and should not lose money provided AMD does not drop below $5.60
2008-05-16 Bought 2 AMD June Puts for $.07 - I was planning on waiting till these expired in June but they dropped so much so quickly that making .07 ($14, 1%) more for another month did not make sense. So I made $66 - $16(commissions) = $50,4.3% in 2 weeks
2008-05-20 Bought 100 AMD for $7.16 - I was planning on immediately selling the call, but I got greedy hoping the stock would go up, and then it dropped, so now Im stuck holding the stock
2008-06-05 Sold 1 AMD June Call for $.80 (Jul 7) - Hopefully I can make $64 here
2008-07-01 Sold 1 AMD July Put for $.55 (Jul 6) - make $110
2008-07-21 Buy 100 AMD for $6.00 - A result of an assigned Put that I did not want
2008-08-21 Sold 2 AMD Oct Call for .60 - make $120
2009-05-12 Sold 2 AMD June Call for .30 - make $60
2009-09-15 Sold 2 AMD Oct Call for .37 - make $74
2009-11-19 Sold 200 AMD for 6.79 - make $42
2010-02-10 Buy 100 ITMN for 15.60 - lose $310
2010-02-10 Sold 1 ITMN Mar Call for 5.90 - make $590 (actually $280 due to above)
2010-05-22 Exp STEC Call for .43 - make $34
2010-08-23 Exp STEC Call for 1.45 - make $137
Current Value: $2006; Current Gain: 2.2%; Goal: $1469; Needed: $26
My POT experience
So I was looking for a good options play and I discovered Potash (POT). Its a fertalizer company that has been running up like mad. I bought it at 198 and immediately sold the next out 195 calls for $15. I was hoping to be called out on these for a $12 dollar profit or 6%. But first the thing takes off to 210 and Im thinking I got the Midas touch, but then it tanks to 180 so what to do now:
If the stock closed like this on expiration day, I would lose 3 dollars (198-15-180).
The call was now trading at $5 which if I had bought back would bring my average price of the stock down to 188, and the 180 calls were selling for $8. I could do this and safely get out of the stock with nothing. Or I could sell the 185 calls for $10 and hope to make $7 or 3.5%.
So what did do... Nothing as I did not plan for this and things happened quickly. Now the stock is trading at 184 which is fine with me.
Actually I really like the premiums on this stock, and so if they do not get called that is preferred as I can sell the next month out calls and hopefully make another 7%. But this strategy relies on the fact that POT must stay at this range and not drop much further. Because if it drops, my loss will be larger then these gains and I will end up with a net loss.
But the wild swings on this stock explain the nice premiums the options are getting.
Lets see how this turns out.
If the stock closed like this on expiration day, I would lose 3 dollars (198-15-180).
The call was now trading at $5 which if I had bought back would bring my average price of the stock down to 188, and the 180 calls were selling for $8. I could do this and safely get out of the stock with nothing. Or I could sell the 185 calls for $10 and hope to make $7 or 3.5%.
So what did do... Nothing as I did not plan for this and things happened quickly. Now the stock is trading at 184 which is fine with me.
Actually I really like the premiums on this stock, and so if they do not get called that is preferred as I can sell the next month out calls and hopefully make another 7%. But this strategy relies on the fact that POT must stay at this range and not drop much further. Because if it drops, my loss will be larger then these gains and I will end up with a net loss.
But the wild swings on this stock explain the nice premiums the options are getting.
Lets see how this turns out.
Wednesday, March 26, 2008
10% just like that (actually %6.5)!
So my stragety of buying leaps and selling the short term calls on AMD is not working out correctly. The problem for me is that I did not have a plan as to which calls I should sell, as I did not want to get called out and lose any money.
The safer approach would be to by the shares outright and then sell the calls. But my returns (%) would be much lower and would require much more cash.
But that is the safer approach and one that I am more familiar with, so that is the way I should try this approach, and then move to holding leaps instead of the asset.
I just tried this with DRYS. This stock is very volatile and that is what is needed to get the premiums to make a good return. I 100 shares at $62.5 and immediately sold 1 $60 April call for $6.50. That means I recieved $650 for a &6200 investment. 10% right off the bat. If the stocks stays above $60, I will be forced to sell my shares at $60 (a $2.50 loss resulting in a net gain of $400) resulting in a %6.5 gain. That is not bad for 1 month.
If the stock drops below $60, then I keep the shares and the money from the call, and I reduce my purchase price of the stock by $6.50 to $56.50. So as long as the stock does not fall below 56.50 by April 18th I should make money anywhere from %0-%6.5
The safer approach would be to by the shares outright and then sell the calls. But my returns (%) would be much lower and would require much more cash.
But that is the safer approach and one that I am more familiar with, so that is the way I should try this approach, and then move to holding leaps instead of the asset.
I just tried this with DRYS. This stock is very volatile and that is what is needed to get the premiums to make a good return. I 100 shares at $62.5 and immediately sold 1 $60 April call for $6.50. That means I recieved $650 for a &6200 investment. 10% right off the bat. If the stocks stays above $60, I will be forced to sell my shares at $60 (a $2.50 loss resulting in a net gain of $400) resulting in a %6.5 gain. That is not bad for 1 month.
If the stock drops below $60, then I keep the shares and the money from the call, and I reduce my purchase price of the stock by $6.50 to $56.50. So as long as the stock does not fall below 56.50 by April 18th I should make money anywhere from %0-%6.5
Friday, March 21, 2008
Dorfman revisted
Its been a while since I posted. Much has happened, and I've been very busy. I consider myself very lucky, as I had been eying BearStearns for a while now, but luckily I did not get in. Wow, the 5th largest investment company in the US is basically insolvent. We are in a lot of trouble.
From what I understand, they have been in a 1:30 margin with their bets on these mortgages. Now all that money is gone, and so it appears is the company.
I wonder if my accounts at my brokerages are in trouble. I will have to look into that.
Anyway, Dorfman was big on BSC and he must have gotten killed on it. But he is back with a new set of picks, and I wanted to note them to see how they do:
CMC - Commercial Metals
OSG - Overseas Shipholding Group
AZN - Astrazeneca
COLM - Columbia Sportswear
DVN - Devon Energy
GS -Goldman Sachs
MTN(short) - Vail Resorts
From what I understand, they have been in a 1:30 margin with their bets on these mortgages. Now all that money is gone, and so it appears is the company.
I wonder if my accounts at my brokerages are in trouble. I will have to look into that.
Anyway, Dorfman was big on BSC and he must have gotten killed on it. But he is back with a new set of picks, and I wanted to note them to see how they do:
CMC - Commercial Metals
OSG - Overseas Shipholding Group
AZN - Astrazeneca
COLM - Columbia Sportswear
DVN - Devon Energy
GS -Goldman Sachs
MTN(short) - Vail Resorts
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