The Money Tree

Safely Generating Income in Retirement

What Others are Trading – August 2011

Posted by mounddweller on July 31, 2011

Fellow Traders,

Another month, another opportunity to share your successes and lessons from the ‘school of hard knocks’.  Rich, Dealmakr, others what have you been trading?

Regards,

Troy

 

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

  1. dealmakr said

    Hi Troy,

    Very rough seas in the market the past few weeks and more vol lies ahead. Its not been a great time for me to be doing covered calls and NP’s on some positions, as when things fall out of bed the hedging of CC’s and having the NP exposure, just doesn’t measure up to a deep swoon in capital while holding the underlying.

    SVU position reopened, was also put GE @ 17 & 18 this week, most at 17, also a few IWM @ 74. Short DELL Aug 14 puts and will see how CSCO does with earnings this week.

    A few of the trades updated below.

    Position updated SVU 08/03/11

    03/23/11 Bot 4000 SVU 8.38 (33520)
    03/23/11 Sold 40 Apr 7 put .05*
    03/23/11 Sold 40 Jul 9 call .60
    03/29/11 Bot 2500 SVU 8.77 (21925)*
    03/29/11 Sold 25 May 9 Call .55*
    04/04/11 Bot 2500 SVU 8.99 (22475)*
    04/04/11 Sold 25 Apr 9 Call .35*
    07/27/11 Bot 4000 SVU 8.70 (34800)
    07/27/11 Sold 40 Aug 9 Call .30
    08/01/11 Sold 25 Aug 8 Put .25

    Closed trades Profit/Loss

    04/16/11 Expired 40 Apr 7 Put 200
    04/16/11 Exercised 25 Apr 9 Call 875
    04/16/11 Sold 2500 SVU 9 25
    04/20/11 Bot close 25 May 9 Call 1.85 (3250)
    04/20/11 Sold 2500 SVU 10.80 5075
    05/27/11 Dividend on 4000 SVU .0875/share 350
    06/08/11 Sold 4000 SVU 8.77 1560
    06/08/11 Bot close 40 Jul 9 Call .45 600

    Total return P/L on closed trades 5435

    Short 25 Aug 8 Put 625
    Short 40 Aug 9 Call 1200

    Figured to try this one again and also looking at opening Aug 8 puts if things get sloppy

    Well, they sure as hell got sloppy.

    Good Trading

    dealmakr

    Updated position XRX 08/03/11

    11/30/10 Sold 50 Dec 11 Put .16*
    11/30/10 Sold 30 Dec 11 Put .15*
    12/06/10 Bot 3000 XRX 11.74
    12/06/10 Sold 30 Apr 12 Call .82*
    12/31/10 Sold 25 Jul 9 Put .30*
    01/21/11 Sold 30 Feb 12 Call .12*
    01/27/11 Sold 30 Feb 11 Call .16*
    02/09/11 Sold open 30 Jul 12 Call .32*
    02/22/11 Bot 1500 XRX 11
    02/22/11 Sold 15 Apr 11 Call .46*
    02/23/11 Sold 25 Oct 9 Put .52*
    03/14/11 Sold 15 Oct 12 Call .40*
    03/16/11 Sold 15 Jul 11 Call .30*
    03/16/11 Sold 25 Oct 12 Call .30*
    03/22/11 Sold 15 May 11 Call .16*
    03/25/11 Bot 1500 XRX 10.68 (16020)
    04/11/11 Sold 20 Oct 12 Call .47*
    04/12/11 Sold 30 May 10 Put .14*
    05/06/11 Bot 1500 XRX 10.35 (15525)
    05/06/11 Sold 20 Jun 10 Put .23*
    05/23/11 Sold 30 Jul 11 Call .11*
    05/25/11 Sold 25 Jul 9 Put .16*
    06/08/11 Bot 1500 XRX 9.47 (14205)
    06/08/11 Sold 35 Oct 11 Call .17
    06/29/11 Sold 25 Aug 9 Put .12
    06/29/11 Sold 25 Jan 9 Put .52
    07/22/11 Sold 40 Sep 9 put .11
    07/22/11 Sold 55 Sep 11 call .12*
    07/29/11 Sold 25 Oct 9 Put .40
    07/29/11 Sold 25 Oct 10 Call .30
    08/01/11 Sold 25 Oct 10 Call .21
    08/02/11 Sold 20 Sep 9 put .40

    Closed Trades Profit/Loss

    12/18/10 Expired 80 Dec 11 Put 1250
    12/29/10 Dividend .0425 on 3000 shares 127.5
    01/21/11 Bot close 30 Apr 12 Call .28 1620
    02/13/11 Bot close 30 Feb 11 Call .13 90
    02/19/11 Expired 30 Feb 12 Call 360
    03/25/11 Bot close 15 Apr 11 Call .05 615
    03/25/11 Bot close 30 Jul 12 Call .14 540
    03/29/11 Dividend .0425 on 6000 shares 255
    04/11/11 Bot close 25 Jul 9 Put .13 425
    05/21/11 Expired 30 May 10 Put 420
    05/21/11 Expired 15 May 11 Call 240
    06/08/11 Bot close 45 Jul 11 call .03 645
    06/08/11 Bot close 20 Jun 10 Put .59 (900)
    06/28/11 Dividend .0425 on 9000 shares 382.5
    07/01/11 Bot close 25 Oct 9 Put .18 850
    07/15/11 Expired 25 Jul 9 Put 400
    07/22/11 Bot close 60 Oct 12 Call .07 1870
    08/02/11 Bot close 55 Sep 11 call .03 495

    Total Return P/L on closed trades 9685

    Long 9000 XRX avg/share 10.83 (97470)

    Stock closed 08/02 8.82

    Short 25 Aug 9 Put 300
    Short 60 Sep 9 Put 1240
    Short 25 Oct 9 Put 1000
    Short 50 Oct 10 Call 1275
    Short 35 Oct 11 Call 595
    Short 25 Jan 9 Put 1300

    Net Position Exposure

    Covered Calls 8500 shares
    Naked Puts 13500 shares

    With the Aug expiration cycle being midpoint, this stock has suffered worse than most in the current weakness on pretty heavy volume. I would guess that the exposure to government spending for revenues is having a larger impact on price action. Stock buyback started with the notes from the 10Q that about 5mm shares were bot in July so far costing 48mm. With the stock falling down rapidly, I would guess they are getting a better deal now. Still would have liked to see the dividend boosted a bit instead of spending the free cash on buybacks as I think it would have provided a better support basis.

    This whole type of options trading works best when the stock is flat to a slightly neutral upward bias and when things fall out of bed can cause a lot of pain. Even with the DCA down to 10.83/share and the premium and dividends received of better than a buck a share, the trade so far is still underwater.

    Good Trading

    dealmakr

    Updated Position HBAN 08/03/11

    03/04/11 Bot 8000 HBAN 6.53 (52240)
    03/04/11 Sold 80 Apr 6 put .12*
    03/04/11 Sold 80 Apr 7 call .13*
    03/07/11 Bot 2500 HBAN 6.68 (16700)
    03/07/11 Sold 25 Jul 6 Put .33*
    03/07/11 Sold 25 Jul 7 call .45*
    03/08/11 Sold 25 Jul 6 Put .30*
    03/09/11 Bot 5000 HBAN 6.77 (33850)
    03/14/11 Sold 50 Jul 8 call .16*
    03/18/11 Sold 50 Oct 6 Put .48*
    03/23/11 Sold 30 May 7 Call .17*
    03/28/11 Bot 3000 HBAN 6.67 (20010)
    04/21/11 Sold 40 Oct 6 Put .36*
    04/21/11 Sold 40 Oct 8 Call .15
    04/21/11 Bot 4000 HBAN 6.57 (26280)
    04/28/11 Sold 80 May 7 Call .07*
    04/28/11 Sold 25 Oct 7 Put .68
    05/23/11 Sold 50 Oct 7 Call .27
    06/01/11 Sold 60 Jul 7 Call .06*
    06/06/11 Bot 2500 HBAN 6.04 (15100)
    06/06/11 Sold 25 Oct 6 Call .50
    06/07/11 Sold 25 Oct 6 Call .60
    06/07/11 Sold 25 Oct 7 Call .21
    06/08/11 Sold 50 Oct 7 Call .21
    06/14/11 Bot 2500 HBAN 6.36 (15900)
    06/24/11 Sold 50 Aug 7 Call .06
    07/21/11 Sold 30 Sep 5 put .05
    07/21/11 Sold 100 Sep 5 Call .05
    07/21/11 Sold 50 Oct 5 Put .07
    07/21/11 Sold 50 Jan 5 Put .20
    07/26/11 Bot 2500 HBAN 6.03 (15075)
    07/26/11 Sold 25 Aug 6 Call .18
    07/27/11 Sold 25 Aug 6 Put .20

    Closed trades Profit/Loss

    03/16/11 Dividend .01 on 15500 shares 155
    04/16/11 Expired 80 Apr 6 Put 960
    04/16/11 Expired 80 Apr 7 Call 1040
    05/21/11 Expired 110 May 7 Call 1070
    05/23/11 Bot Close 50 Jul 6 Put .17 725
    06/07/11 Bot close 85 Jul 7 call .03 1050
    06/15/11 Dividend .01 on 27500 shares 275
    07/07/11 Bot Close 90 Oct 6 Put .19 2130
    07/15/11 Expired 50 Jul 8 Call 800

    Total return on closed trades 8205

    Long 30000 HBAN avg/share 6.50 (195125)

    Stock closed 08/02 5.73

    Short 25 Aug 6 Put 500
    Short 25 Aug 6 Call 450
    Short 50 Aug 7 Call 300
    Short 30 Sep 5 Put 150
    Short 100 Sep 7 Call 500
    Short 50 Oct 5 Put 350
    Short 50 Oct 6 Call 2750
    Short 125 Oct 7 Call 2925
    Short 25 Oct 7 Put 1700
    Short 40 Oct 8 Call 600
    Short 50 Jan 5 Put 1000

    Net Position Exposure

    Covered calls 30000 shares
    Naked Calls 9000 shares
    Naked puts 18000 shares

    Still like the story here and will trade around it. Options can be closed early depending upon market conditions.

    Good Trading

    dealmakr

    • mounddweller said

      dealmakr,

      You’ve definitely been busy. Lots of interesting trades. As always thanks for sharing!

      Regards,
      Troy

  2. Rich said

    Its been awhile since I posted here.

    With the continued market selloff yesterday I decided to roll my 2 AUG 15 AA cash secured puts. With the turmoil in the markets lately, I cannot see AA getting above 15 by the end of next week. I had one put in each of two IRA accounts so I rolled both out to Jan 15 puts for net credits.

    I do not own any shares of Alcoa. As such, I am not that concerned that the share price has dropped so much over the past 30 days. One of the benefits of selling cash secured puts is the ability to keep rolling your contracts out to avoid assignment when they are in the money. Normally I would roll out and down but could not do that this time. I had to roll out to Jan 2012 in order to get the credits, which I always strive for. In Phil town’s words, rule #1 is “never lose money”.

    Obviously, if the market keeps falling we may get to a point where I will not be able to roll for a credit. At that point I could roll and take a debit or I could simply let myself be assigned. In both accounts I have accumulated enough cash from selling puts to pick up the stock at a net cost of zero.

    Rich

    • mounddweller said

      Rich,

      Was beginning to think you had abandoned trading while enjoying the summer travel season. Glad to see you’re still at it. Although I’m sure the last week or so hasn’t been fun.

      Regards,
      Troy

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