The Money Tree

Safely Generating Income in Retirement

Archive for August 19th, 2011

New Weekly NP Trade – MSFT

Posted by mounddweller on August 19, 2011

Fellow Traders,

Today I placed another weekly trade.  I STO 5 AUG26 MSFT $23 puts at $0.24.  My ROIC (net of commissions) is 0.948% which equates to 49.45% annually.  MSFT was trading at $24.09 when my trade executed.

I like MSFT at $23.  It has support at this price.  However, given the current market volatility no support level should be considered rock solid.

Regards,

Troy

 

 

Posted in Portfolio Updates, Troy's New Picks! | Tagged: , | 1 Comment »

Deep OTM NP Strategy – AUG Results

Posted by mounddweller on August 19, 2011

Fellow Traders,

As one might expect given the recent market volatility the Deep OTM NP Strategy didn’t perform very well this month.  Over the past 5 weeks the Deep OTM NP Strategy presented us with 236 selections.  At expiration today 90 of those 236 possible trades finished ITM.  This equates to a 61.9% ‘win’ percentage.

Trading all 236 selections would have required a substantial cash outlay of $1.9 million (assumes cash secured puts, no margin).  Premiums net of commissions would have equaled $23,878.50.  This would have resulted in a net premium ROIC of 1.25% (13.47% annualized).  However, had you let all of your positions run to expiration you would have incurred a substantial loss of  capital.  Capital losses would have totalled (including commissions) $69,296.70.

However, had you only entered trades on the 10 selections I personally recommended you would have done far better.  Only 1 of my 10 selections finished ITM.  My lone loser was Riverbed Technologies (RVBD).  It was a selection in Week 5.

Well, AUG is in the history books.  I’ll be back later this weekend with selections for Week 4 of SEP.

Regards,

Troy

Posted in Deep OTM NP Strategy | 1 Comment »