The Money Tree

Safely Generating Income in Retirement

What Others are Trading – September 2009

Posted by mounddweller on September 2, 2009

OK guys, here’s the new thread to let everyone know what you’re trading this month.  Don’t be bashful now, speak right up.  Volatility has returned to the market.  That spells opportunity for option sellers like ourselves.  What looks good to you?

Advertisements

8 Responses to “What Others are Trading – September 2009”

  1. I am a newbie to Options. I wrote my first few CC options.

    CC GMEIM 24 Sept 09 (GME) at 1.05
    CC GMEJE 25 Oct 09 (GME) at 1.05
    CC PLQLM 23 Dec 09 (SPLS) at 0.9

    I think I understand CC but i have yet to learn the valuation, how to pick ITM, OTM and expiration dates. Lets see how my first options go.

  2. Rich said

    XLF update….Back on Aug 12 I BTC one Aug 13 call and one Aug 12 call, rolled them forward to 2 Sep 12 calls for a net gain of $81.98. I was able to combine the two single contracts and make some cash and save on commissions. Yesterday I bought back the Sep 12 calls and sold the Dec 12 calls for another gain of $62.98. I’m still upside down in XLF and will most likely never recoup my total loss. However, I’ll keep rolling these contracts forward as long as I can keep chipping away at the drawdown. I’ll call this action a sacrifice bunt instead of a single! I would think that sooner or later I will get an early assignment and be able to move on with the cash.

  3. Rich said

    Itconsultant,

    Have you read Ron Groenke’s book “Show Me the Money”? In it he explains:

    sell ITM calls if you think the stock may go down
    sell ATM calls if it appears the market will be range bound
    sell OTM calls if the stock is in a good uptrend and the broader market is rising

    Having said that, in my own case, I want to achieve a minimum 20% annual gain on my portfolio so I buy good blue chip stocks and other high yield stocks and I try to sell call options that will give me at least a 1.66% monthly gain. I averaged a 34% return for the 12 month period ending July 2009 so I know it can be done.

    Rich

  4. Rich said

    I took another position in UYG yesterday. Visions still has the TAI as TA so I bought 100 shares at 5.86 and sold the Oct 6 call. This gives me a 3.71% gain if it expires out of the money or a 3.2% gain if its assigned at expiration. I consider this a good return for just a little over 30 days.

  5. Ted Soprenuk said

    Troy

    I was thinking about getting together with you this weekend to talk about trading covered calls, if your schedule allows. You can pick the day and time. I would like to show you a spreadsheet flow chart I developed, if we could meet at my house, you can see the program.

    Thanks

    Ted

  6. Rich said

    Well the pause in the market over the last two days enabled my two Sept calls ( GE SEP 18 & PWE SEP 15 )to expire out of the money. This is the first time in a couple of months where I won’t have to roll these calls forward. I plan on rolling them up instead come monday hoping to benefit from the growth in both stocks over the past few months.

    Rich

  7. Rich said

    I bought another 100 shares of PWE today. Since I use my portfolio as a cash machine ( ie…I draw income each month from it ) I try to determine what my monthly income would be from each contract I write. I use DPO as my benchmark. It pays around an 18% dividend ( .16666 per share per month ) so I compare option income to this. Why invest in a stock if I cannot get a total return better than DPO? PWE pays about an 11% dividend and it has options which really gets the yield up there. So I combined my new shares with the 2 contracts that expired in Sept and sold 3 DEC 15 calls for .55 The income from these three contracts including the dividend gives me about $100 more over the three months than if I had 300 shares of DPO

  8. Rich said

    I had two DEC 12.50 PWE contracts assigned early on Monday Sep 28 when the market opened up. The total gain on these two positions which were bought back in Mar and May was just a little over 20%. this gain includes stock growth, option premiums and dividends.

    Today I bought 100 PWE @ 14.32 and sold one March 15 contract for 1.15. If assigned in March this will net approx a 14% gain.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

 
%d bloggers like this: