The Money Tree

Safely Generating Income in Retirement

Other Trades from the Week of Feb. 7-11, 2011

Posted by mounddweller on February 13, 2011

Fellow Traders,

Wanted to update you on a couple other trades I made this past week.   First up is XOM.  I opened my position in XOM just over a year ago.  My goal was to accumulate 400 shares with the intent to hold them long-term and periodically sell CCs against them.  My goal remains the same but I chose to exit the XOM position for the time being since XOM has moved up significantly in the past several months.

On Wednesday, I BTC my JAN ’12 $65 put for $1.74.  I made $252 (3.89%) on this specific trade in exactly 3 months.  My annualized return worked out to 15.41%.  In just over a year I made a profit of $1,922.25 in XOM.  This was accomplished using a combination of NPs, taking assignment, selling CCs, being assigned, and selling more NPs.  On average I would say I had around $13K committed to the position throughout the year so that would give me an overall return of better than 14%.  Not bad for a blue-chip stock like XOM.  I will look to get back into XOM if it falls back below $70.  Below is a complete history of my trades in XOM.

My other trade this week was in CSCO.  CSCO fell sharply after reporting disappointing earnings.  Actually it was there operating margin which caused all the fuss.  CSCO falling sharply after reporting earnings is becoming a rather common occurence.  It happened last quarter and I took advantage of it by selling OTM NPs.  I did the same this quarter.   On Thursday, I STO 5 MAR $18 puts at $0.21.  My ROIC with 36 days to expiration is 1.17%.

OK, that’s it.  Three posts in one day is my limit.  Best of luck to everyone this week.  I’ll be back next week with another round of Deep OTM puts for your consideration.

Regards,

Troy

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