The Money Tree

Safely Generating Income in Retirement

MYGN – Final Results

Posted by mounddweller on November 27, 2010

All,

It’s been quite a while since I’ve posted anything on my blog.  My apologies.  However, no posts doesn’t mean I haven’t been trading.  It just means my trading has drifted away from exclusively following and selecting only VISIONS trades.  More about that later. 

Right now I want to update you on the final results of my MYGN trade.  You’ll recall I entered this trade with a buy/write back on March 29th.  Shortly after that a court case went against MYGN that invalidated some of their patents.  This caused the stock to drop substantially.   After MYGN went nowhere for 6 months I decided to sell calls below my break-even price.  Of course Murphy’s Law came into play a few short weeks later and the stock jumped back up above my $17.50 strike price.   It then stayed there and closed ITM at the November expiration.  Rather than trying to buy the option back and roll it out, I decided to let it be called away at a loss.  This was my first loss ever using Ron’s VISION’s methodology.

Below is a snapshot of my MYGN trade:

Let’s spend a minute evaluating what I could have done differently to prevent this loss.  First, better due-diligence upfront before placing the trade may have revealed the potential patent issues.  Second, I could have been more aggressive in my trading after the stock fell.  I only sold one round of puts.  Had I continued to sell puts instead of the calls, I more than likely would still have MYGN in my account and would continue to lower my net cost basis.

Regards,

Troy

5 Responses to “MYGN – Final Results”

  1. Thanks for your transparency. It’s refreshing to see that their are still traders out there willing to post their results.

    • mounddweller said

      Travis,

      You’re welcome. I post both winners and losers for several reasons:

      (1) it’s the right thing to do!
      (2) how will we ever learn from each other if we don’t admit our mistakes and seek input from others
      (3) posting my mistake may keep someone else from making the same mistake

      Regards,
      Troy

    • Yes I would say those are GREAT reasons!

  2. dealmakr said

    Hi Troy,

    Here is how my KLIC trade is working

    Updated Position KLIC 11/26/10

    09/21/10 Bot 5000 KLIC 6*
    09/21/10 Sold 50 Oct 6 Call .35
    09/21/10 Sold 25 Oct 6 Put .40
    09/22/10 Bot 2500 KLIC 5.77*
    09/22/10 Sold 25 Oct 6 Put .40
    09/22/10 Sold 50 Oct 5 Put .10
    09/22/10 Sold 50 Nov 5 Put .20
    09/22/10 Sold 25 Nov 7 Call .20
    10/08/10 Bot 2500 KLIC 5.80*
    10/08/10 Bot 2500 KLIC 5.92*
    10/08/10 Sold 50 Nov 6 Call avg .40
    10/08/10 Sold 50 Nov 7 Call .15
    10/08/10 Sold 25 Nov 5 Put .20
    10/11/10 Bot 2500 KLIC 5.80*
    10/11/10 Sold 25 Nov 6 Call .40
    10/14/10 Sold 25 Nov 6 Call .40
    10/15/10 Bot 5000 KLIC 6.15*
    10/15/10 Sold 25 Nov 6 Put .50
    10/27/10 Bot 2500 KLIC 6.15
    10/27/10 Sold 25 KLIC Dec 6 Put .45
    10/27/10 Sold 25 Dec 6 Call .60
    11/11/10 Sold 50 Dec 6 Call .45
    11/18/10 Sold 25 Dec 6 Call .30
    11/18/10 Sold 25 Jan 5 Put .20
    11/18/19 Sold 50 Jan 6 Call .50
    11/18/10 Bot 2500 KLIC 5.99

    Closed Trades Profit/Loss

    10/15/10 Bot Close 25 Nov 7 Call .25 09/22 sale (125)
    10/15/10 Expired 50 Oct 5 Put 500
    10/15/10 Expired 50 Oct 6 Put 2000
    10/15/10 Exercised 50 Oct 6 Call 1750
    10/15/10 Sold Exercise 5000 KLIC 6 (09/21 buy) 0
    11/05/10 Bot Close 25 Nov 6 Put .10 1000
    11/05/10 Bot Close 25 Dec 6 Put .30 375
    11/11/10 Bot Close 50 Nov 7 call .05 500
    11/19/10 Bot close 50 Nov 6 Call .20 1000
    11/20/10 Expired 75 Nov 5 Put 1500
    11/20/10 Exercised 50 Nov 6 Call 2000
    11/20/10 Sold exercise 5000 KLIC 6 (9/22&10/08 buy) 1125
    11/26/10 Bot Close 100 Nov 6 Call .84 (3900)
    11/26/10 Sold 10000 KLIC 6.69 6850

    Total return P/L on closed trades 14575

    Total Position Cost/Premium received

    Long 5000 KLIC avg 6.07 (30350)

    Short 25 Jan 5 Put 500
    Short 50 Jan 6 Call 2500

    Net Position Exposure

    Covered Calls 5000 Shares
    Naked Puts 2500 Shares

    Reduction in positions overall with just too much stuff going on around the globe. In taking off the trade, most of the profit could be gained for a net cost of about .15/share in the unwind capturing 2/3 of the total theoretical profit if called at expiration with 3 weeks left to go. The trade can be adjusted in the future depending on what shakes out near term. All exercised stock will be shown on a FI/FO basis (first in / first Out).

    Good Trading

    dealmakr

  3. dealmakr said

    Another trade on BRCD

    Opening position BRCD 12/01/10

    11/24/10 Sold 50 BRCD Dec 5 put .13
    12/01/10 Bot 5000 BRCD 5.02
    12/01/10 Bot 5000 BRCD 5.01
    12/01/10 Sold 100 Dec 5 Call .18
    12/01/10 Sold 100 Dec 5 Put .16

    Long 10000 BRCD avg 5.02 (50200)

    Short 100 Dec 5 Call 1800
    Short 150 Dec 5 Put 2250

    Decided to buy stock and write CC’s for short duration and add to open put position. There is a real good chance that tax loss selling will pressure the stock IMHO. A lot of takeover chatter still around though and will hope that it remains close to the 5 strike.

    Good Trading

    dealmakr

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