The Money Tree

Safely Generating Income in Retirement

What Others are Trading – March 2011

Posted by mounddweller on March 5, 2011

Fellow Traders,

Here’s your chance to brag about your winning strategies and trades or lament about your losses.  Rich, you didn’t even need to remind this month to start the new post.  Let’s see if I can make it two months in a row in April (ha ha).

Regards,

Troy

Advertisements

4 Responses to “What Others are Trading – March 2011”

  1. Rich said

    Rich’s Money Tree update 3/7/2011

    As long as the unrest in Libya continues the markets will remain uncertain, especially with the prices of oil going up.

    I had three Mar 17 AA cash secured puts open. My feeling is that AA has a better chance of staying above 16 than it has of moving back up above 17. So this morning I took the following action:

    bought to close 3 Mar 17 AA puts @ .57
    sold to open 2 APR 16 AA puts @ .47
    sold to open 2 JUL 16 AA puts @ 1.05

    Essentilally I rolled the 3 Mar 17 puts forward and down to 2 Jul 16 puts, with the freed up 1700 cash I was able to add an additional 1600 cash and then sell the two APR puts. Little by little I’m putting more of my idle cash to work. I am still below my annualized goal of 12% return ( currently at just over 10% annualized) but as I put more cash to work I’m confident I can obtain my goal before years end.

    Annonomus quote: It is better to plan a lot and accomplish only half then to plan nothing and accomplish it all

    Rich

  2. Rich said

    I got greedy. back on Feb 24 I rolled 2 Mar 14 puts up to 2 Mar 17 puts to pick up some xtra cash. Boy was that a mistake. SPWRA began to reverse its trend and has been selling off ever since. Its now trading below 16 a share. So today I did some damage control and rolled my 2 Mar 17 puts out to 2 Jun 16 puts for a net credit. Hopefully this will give me some room for the stock to settle out and maybe move back up above 16. If not I will have to look at rolling the puts out and down again to SEPT or later. I have a nice 2% ROI so far YTD on this scorecard. I’ve got to remember that bulls and bears make money, pigs get slaughtered!

    One of the good things about selling puts is that you have a lot more flexibility to repair a bad trade than if you had owned shares of stock that were selling off.

    Rich

  3. Rich said

    This morning I took the following action as a result of the market selloff:

    BTC 1 Alcoa Mar 16 put @ .65 and STO 2 Alcoa APR 15 puts @ .54 for a net credit

    This trade reflects the need to keep a cash reserve at all times to take advantage of large market sell offs. In this case, with option expiration only a few days away and my Mar 16 put now in the money, I was able to buy the option back at a small loss and then by selling two Apr 15 puts I managed to come out with a net credit.

    Both the market and Alcoa have regained earlier losses as of this afternoon. I am now holding the following AA puts on this scorecard:

    2 APR 15
    3 APR 16
    2 JUL 16

    Rich

  4. Rich said

    This afternoon I added another Alcoa put to my scorecard. The market was down over 200 points at the time. I figured out what premium would give me a 30 day 3% return and I put in a limit order to sell 1 APR 15 cash secured put@ .54. It was filled pretty quickly. So if shares of AA can stay above $15 at April expiration I’ve got a net 3% return.

    My only remaining March put is an INTEL Mar 20. I was hoping that INTEL would remain above 20 and expire. I would then use the cash to sell another AA put next week. AA premiums are more attractive to me than INTEL right now. If the market gives us a bounce before friday close I’ll be OK otherwise I’ll have to roll the INTEL put forward. As long as I can work in a credit its a win for me.

    Rich

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: