The Money Tree

Safely Generating Income in Retirement

Archive for January 1st, 2014

2013 Results

Posted by mounddweller on January 1, 2014

Fellow Traders,

2013 was a relatively good year for trading in The Money Tree portfolio.  Did I beat the market?  No, not by a long shot.  However, I was able to consistently generate small profits by selling naked puts and covered calls.  My overall ‘win’ percentage was the highest its ever been in seven years of trading  I closed 56 of 59 (94.92%) trades at a profit.  However, I wouldn’t be totally honest with my readers if I didn’t talk about what is not found in those results.  Regular readers know I struggled in 2013 with losing positions in EXC and GDX.  Since those trades remain open they are not included in my overall results.  On more than one occasion in 2013 I came very close to throwing in the towel on these trades.  However, after getting my emotions in check I decided to continue to work them back to a hopefully profitable close.

Notable trades in 2013 included CAT, CSCO, LNCO, and TEVA.  I successfully traded CAT 4 times in 2013 generating a net profit of $549.10.  CSCO was even more successful.  I had 5 trades in it for $651.40.  LNCO had 4 trades totaling $665.80.  Last, but certainly not least, was TEVA.  It was my most consistent and most profitable trading vehicle in 2013.  I closed 6 trades in TEVA with profits totaling $806.95.

Below is a listing of all 59 of my trades that I closed in 2013.

BLOG - 2013 Closed Trades p1

BLOG - 2013 Closed Trades p2

BLOG - 2013 Closed Trades p3




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December 2013 – Results

Posted by mounddweller on January 1, 2014

Fellow Traders,

Happy New Year!  While sitting in my easy chair and watching bowl games I’m going to take a moment to document the trades I closed in December.  In December I closed 7 trades in 6 stocks, $VIX, ABT, ADM, CSCO, OKE, and RYN.

(1) $VIX – This is one of the 3 trades that I closed for a loss in 2013.  The problem with this trade is that I waited too long to roll out my long calls.  Back on October 18 I BTO the JAN $13 calls.  According to the rules of the trade strategy I should have rolled them out to FEB/MAR when the premium had decreased by 20%.  Forgetting to do this, I let too much premium erode and when volatility did increase the increase in the premium was too little too late.  My inattentiveness cost me $255.90.

(2) ABT – On 12/31 I BTC 3 JAN $36 puts at $0.10.  I STO the trade back on 12/9, selling the puts for $0.46.  My ROIC for the 22 day holding period was 0.84%.

(3) ADM – On 12/23 I BTC 3 JAN $39 puts at $0.24.  I also STO this trade on 12/9, selling the puts for $0.63.  My ROIC for the 14 day holding period was 0.86%.

(4) CSCO – You’ll recall last month I told you about my setting up a put ladder in CSCO.  I sold puts with JAN, APR, and JUL expirations at the $20, 19, and 18 strikes respectively.  The objective of the trade was to eventually own CSCO at a net cost per share of < $20.  Since executing that trade CSCO has ran up substantially greatly reducing the premiums in my puts.  Consequently I decided to take some profit by buying back the APR and JUL puts.  My ROIC for the 47 day holding period was about 1.64%.

(5) OKE – This is the last of the 3 trades that I closed for a loss in 2013.  It was a very small loss of only $12.85, but a loss nonetheless.  This is a trade that I initiated back in May.  My original intent was to sell puts and accept assignment to establish a long-term position at a price at which I was comfortable owning the stock.  Events at the company caused the stock price to gyrate wildly.  I mistimed my recovery trade and then was left watching the stock run away from me.  I don’t have an interest in owning it at the current price so I chose to BTC my open puts for the small loss.  If OKE returns to my buy range I may consider selling puts again.

(6) RYN – Last up is Rayonier.  This is a long-term holding of mine.  Earlier this year they announced disappointing forward guidance and the stock sold off sharply.  Rather than just buying more stock outright I chose to sell an ITM put.  Doing so netted me $167.55.  My ROIC was 3.72% with a 35 day holding period.

Later today I’ll be updating the “Historical Results” tab to include the results of all of my trading in 2013.



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