The Money Tree

Safely Generating Income in Retirement

May 2013 – Results

Posted by mounddweller on June 2, 2013

Fellow Traders,

Another month has flown by and I haven’t managed to post a single message.  My apologies for not keeping you up to date on my trading activities.  My usual monthly summary will once again have to suffice.  Let’s take a look and see how I did.

Number of Closed Positions: 7

Profit on Closed Trades: $817.80

Total Capital Used on Closed Trades: $80,550.00

Average Number of Days Trades Were Open: 31

Return on Invested Capital: 1.02%

OK, before I move on to the stats for my open trades, let me tell you a little more about these closed trades.  6 of the 7  closed trades were naked puts.   5 of the 6 naked puts expired OTM and 1 (CAT) I bought back before expiration at a profit.  My puts expiring OTM were in NUE, CCJ, OKE, TEVA, and CSCO.  My one and only CC trade was in GDX where I sold and BTC the JUN 32.50 calls for a profit.  Regular readers will recall I’m trying to dig myself out of a whole in GDX.  I had the stock put to me a while back at $40.

Now let’s look at my open trades.

Number of Open Positions: 4

Net Cash Flow in April from Open Positions: $425.80

Total Capital Used on Open Trades: $34,900.00

Net Cash Flow on Invested Capital: 1.22%

This month I opened four new positions, two in EXC, one in MRK, and another in OKE.  My objective in the EXC and OKE trades differs from that of the position in MRK.  My objective in the MRK trade is for it to expire OTM and then re-evaluate if it looks suitable for a follow-on trade next month.   My objective in the EXC and OKE trades is to eventually own the shares and establish long-term positions in these companies.  It appears I may get my wish sooner than I originally anticipated because with the recent sell-off in high yield utility shares both EXC and OKE have fallen below my strike prices.  I am short EXC at both the $34 and $32 strike and OKE at the $47.50 strike.  Depending on what happens in the next week or so I likely will roll the EXC $34 options out and down and except assignment of EXC at $32.   With OKE I may except partial assignment and roll the remainder of the position out and down while expanding the number of open puts at the lower strike.

Going into June I am considering a repeat trade in TEVA at $37.50 and new trades in CHRW at $55, GME at $28/29, and KO at $38.  If anyone else cares to share trades they’re considering please let us know!

 

Regards,

Troy

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2 Responses to “May 2013 – Results”

  1. Esa said

    Dear Troy,

    Greetings from Finland! I’ve been reading your blog and want to give thumbs up for the nice work you’re doing. I had one question in my mind concerning how you calculate the total capital used? I’m not sure if you do shorter than approximately 30 days long options but let’s say you had three positions in different stocks during the month each employing 5k of capital and lasting 5 days. How would you calculate the impact of these trades on the capital used? Thanks for your reply in advantage and keep up the good work!

    Best regards,
    Esa

    • mounddweller said

      Esa,

      Thank you for taking time to read my blog! Since you’re in Finland perhaps I can now claim to be the “world renowned money tree blogger” (ha ha). Your question is a good one. So much so that I decided to write a separate post on that topic.

      Regards,
      Troy

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