The Money Tree

Safely Generating Income in Retirement

Archive for December 4th, 2010

A New Tool for Your Option Toolbox

Posted by mounddweller on December 4, 2010

All,

Today I’d like to reintroduce you to a tool I’ve been using for the past several months.  Back in June I posted a message about my investing buddy Patrick’s new option search engine on his Market Timing Research web-site (www.mtrig.com).   Using Patrick’s search engine you can find either call or put options which meet your specific criteria. 

You can search by: Market Sector (i.e., Utilities, Technology, etc.), Option Type (Call or Put), Desired ROIC (i.e., 1%, 2%, etc.), Expiration Date, Range of Stock Prices (ex. $10 to $50), Range of Price/Earnings Ratios (ex. 5 to 20), and Dividend Yield. 

Patrick has made a lot of updates to the search engine since initially rolling it out back in June.  For example, you can now search for option on practically the entire universe of stocks; small-caps, mid-cap, large-caps and even ETFs.  You can also limit your search to stocks that are approaching their ex-dividend date.

Search results have also been expanded.  In addition to containing the following fields: Stock Symbol, Stock Price, Option Type, Strike Price, Expiration Date, Last Traded Price of the Option, Bid and Ask Prices on the Option, Total ROI, Monthly ROI, Last Trading Day Volume, and the Open Interest; the results now also include implied volatility, the Greeks, and the dividend ex-date and pay-date.  The search results are displayed in a scrollable box on the screen.  Patrick has also provided a convenient way to export the search results to Excel.      In addition, you can quickly pull up a chart of the underlying stock.  The chart pops up in a new window.

So, why do I like this tool?  Well, first and foremost, it is quick and easy to use.  Also, it is web-based so you can access it anywhere you have an internet connection.  I have been successfully using the tool for the past six months to beta-test a new naked put strategy I’ve developed.

Here’s a link to the tool on Patrick’s site: http://www.mtrig.com/Members/OptionsAdvancedSearch.aspx.  Go check it out! 

Regards,

Troy

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Rich’s INTC Trade

Posted by mounddweller on December 4, 2010

All,

A first for The Money Tree blog.  I am posting a message on someone elses trade.  My investing buddy, Rich shared with me his INTC trade.   His results todate are superb.  Thus, I want to share them with you.

Rich’s strategy has been to sell OTM puts every month on INTC.  His objective is to use other people’s money to eventually buy INTC stock.  He started in January, buying 100 shares of INTC and then selling a CC against those shares.  From that point on Rich has been aggressively selling OTM puts, using the resulting cash flow to reduce his cost basis on his 100 shares.  As of today he has generated $1,867.25.  He only needs another $215.75 to own his 100 shares of INTC free and clear.  His rate of return on the average amount of invested capital used in selling the cash secured puts is 8.58%.  Below is a Rich’s complete INTC transaction history.

Way to go Rich!

Regards,

Troy

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