The Money Tree

Safely Generating Income in Retirement

Posts Tagged ‘QCOM’

New Trade – QCOM

Posted by mounddweller on January 29, 2015

 

 

Fellow Traders,

Yes, it really is me and I’m really going to post something to my blog.  My apologies for the extended hiatus.  The reason I haven’t posted anything of late is because I haven’t been doing any trading.  I’ve continued to follow the market but wasn’t finding anything that I felt was worth risking my hard earned money on.

The increased volatility is starting to make that change.  More and more stocks are selling off from their multi-year highs and are beginning to hit major levels of support, either in the form of a 200 day moving average or previous support levels.

Today I used the huge selloff in QCOM to stick my toe back into the water so to speak.  I started with a very small trade, selling only 2 contracts of the QCOM FEB $60 put for $0.65.  If the puts expire OTM my ROIC will be 1.08%.  With only 23 days to expiration my annualized return is 17.2%.

Below is a 3-yr chart for QCOM.  As you can see there is plenty of support for QCOM at $60.

BLOG - QCOM 3 yr chart

I executed my trade very early in the trading day.  At 9:38 am ET to be precise.  Hindsight being 20/20, as you can see in the 1-day chart, it is clear that I was early in the trade.  Had I waited until later in the day I would have been able to get a great deal more for the FEB $60 contract.  However, at the time of my trade QCOM was at $64.42, 9.3% below the previous day closing price of $70.99.  That’s a huge one-day drop for a blue-chip stock like QCOM.  I felt QCOM couldn’t fall much further.  Also, since I still have a day job I couldn’t sit and stare continuously at my trading platform waiting for the stock to hit the very bottom for the day.

By the end of the day QCOM finished well off its lows.  Thus, I am very comfortable with my entry point.

BLOG - QCOM 012915 chart

My plan is to buy back the puts at $0.10 or less before expiration.  If QCOM closes below $60 before expiration I will roll the puts out and down, possibly adding more contracts as necessary to maintain a net credit on the trade.  However, given the current ‘up one day, down the next’ volatility we’re experiencing right now in the market I don’t think that will become necessary.  I think QCOM will bounce significantly before expiration.

Best Regards and Good Trading,

Troy

 

 

 

 

 

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Posted in Portfolio Updates | Tagged: , | 7 Comments »

August 2014 Results

Posted by mounddweller on August 29, 2014

Fellow Traders,

Well another month has passed us by.  This one seemed to pass by very quickly.  Let’s see how I did.

I closed 5 positions this month, 4 were winners and one was a loser.  Let’s put the bad news behind us and talk about the loser first.  Back in April of this year I bought JUL $VIX puts.  My rationale was that the VIX was very low and that we’d have a pullback at some point before July expiration after all the big shots on Wall Street headed for the Hamptons in late May.  Alas, the substantial pullback I felt was a certainty never transpired.  Instead the averages just kept plowing on to new highs and the $VIX got even lower.

In early JUL as expiration drew ominously closer I decided to roll my puts out by selling the JUL puts and buying AUG puts.  The total amount of capital I had in the trade at this point was $1,578.  Thankfully for me we finally got a small, quick pullback in early AUG which allowed me to exit the position with a loss of just $530.  Am I happy about the loss, definitely not!  However, it is a much better result than losing the entire $1,578.  I could have rolled out again and tried to wait out being able to exit at a profit but given the market’s trend to the upside I decided to just cut my losses and move on.

This was the 3rd time I’ve tried to trade the $VIX.  I’ve lost money 2 of the 3 times.  I doubt I’ll try this trade again anytime soon.  OK, enough said about the lone loser.  Let’s now look at my winners.

My four winning trades were in INTC, MAT, QCOM, and TGT.

Last month I told you about being called out of my long-term position in INTC with deep ITM covered calls at $27.  The other part of that original trade included more covered calls at the AUG $26 strike.  I got called away at $26 and ended up making 9.88% on the trade.  I still have some INTC left in my account that I hadn’t sold covered calls against.  I will look to add to that position in the coming months once INTC falls back into my buy range which is just under $30.

Now, let’s look at MAT.  You’ll recall I originally sold the AUG $35 puts at $0.35 and my plan was to take assignment if they closed ITM and then turn around and sell SEP covered calls and try to collect the $0.38 dividend, the ex-date of which was 8/25.  Well, at AUG expiration MAT closed at $35.08, thus my AUG puts expired worthless.  On the following Monday with the dividend ex-date only one week away I took another look at my options.  As it turned out premiums were far better for the SEP puts than they were for the calls even after accounting for the $0.38 dividend.  Thus, I decided to sell the SEP $35 puts for $0.70.  After going ex-dividend on 8/25 MAT fell through support at $35 and got to as low as $34.46 on 8/26.  On 8/27 it bounced so I decided to buy back the SEP $35 puts at $0.55.  Doing so got me out of the trade with a profit of 1.24% in 41 days.  I’m now looking for a good time to re-enter the position as I feel MAT is a true bargain at these levels.  I’m currently tracking the SEP and OCT $34 puts.  MAT closed today at $34.46.

Next up is QCOM.  Last month I mentioned that QCOM was taking me for a wild ride.  Thankfully the ride, while exciting, ended profitably.  I entered this position back on July 24th by selling the AUG $74.50 puts.  A week later I had to role these down to the AUG29 $74 puts.  Then just one day later I had to roll down yet again, this time to the SEP $72.50 puts.  I also had to increase the number of contracts to keep the trade in a net credit status.  It bottomed at $72.49 on August 7th and has been rising nicely ever since.  On 8/26 I bought back my SEP $72.50 puts at $0.13.  I ended up closing the trade with a net gain of 0.79% (about $180).

My last ‘closed’ trade is in TGT.  I have closed in quotation marks it isn’t officially closed yet.  I’m actually waiting on the dividend I captured to hit my account on 9/10.  On 8/15 I bought TGT at $58.06 and sold the AUG22 $58 calls for $0.61.  I had the stock called away from me on 8/22.  However, I still earned the $0.52 dividend.  My net gain on the trade will be 1.68% with a 26 day holding period.

That’s it for my closed positions.  However, I also opened some new positions this month as well.  I currently have open positions in KMI, MCD, TROW, and VALE.  All but VALE are on my long-term hold list.  With KMI I already have a small position that I’m hoping to expand by having sold the SEP $37.50 puts at $0.63.  I initiated a small position in MCD by just buying the stock outright.  I couldn’t find a decent covered call trade I liked to try to capture the dividend so I just bought it straight out.  With TROW I’ve been selling the $80 puts for a couple months now.  It goes ex-dividend on 9/10 so I’ll need to make a decision on it in the next week or so.  Last up is my brand new trade that I just entered today in VALE.  On the Yahoo message board I frequent they’ve been talking about VALE for quite some time.  It’s not on my list of tracking stocks but after hearing about all of the successful trades everyone was making in it I decided to give it a try.  Today I sold 10 VALE SEP $12.50 puts at $0.15.  We’ll see how everything turns out in about 3 weeks.  My plan is if assigned at $12.50 is to sell covered calls and try to capture the large, semi-annual dividend of $0.4075 dividend in October.  If the puts stay OTM I may go ahead and do a separate buy/write trade later in the month to try to capture the dividend.

Well that’s it for another month.  Happy trading.

 

Best Regards,

Troy

 

 

 

 

 

 

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Weekly NP Strategy – SEP 30 Expiration Results

Posted by mounddweller on October 1, 2011

Fellow Traders,

You’ll recall last week I chose 3 trades out of the 119 selections presented to us.  My chosen trades were as follows:

(1) INTC $20 strike

(2) MSFT $24 strike

(3) QCOM $45 strike

Let’s see how my chosen trades turned out.  First, up is INTC.  INTC closed at $21.62 last Thursday.   Over the next 6 trading days it traded as high as $22.98 and closed Friday just $0.01 above its low of $21.33.  Thus, the puts finished OTM and folks who took this trade earned 0.55% ROIC in just 6 trading days.

Next up is MSFT.    MSFT closed last Thursday at $25.06. It got as low as $24.73 and yesterday closed at $24.89.   This trade paid $0.24 or 1.00% ROIC.  That is an incredible one week yield for a AAA rated, blue-chip stock like MSFT.

Last up is QCOM.  It closed at $50.03 a week ago Thursday.  Since then QCOM has fallen consistently and closed at its low for the week at $48.63.  However, the $45 strike finished well OTM.  The ROIC was 0.53%.

Well, that’s it for our week in review.  The Weekly NP Strategy continues to perform well despite high volatility.

Regards,

Troy

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Weekly NP Strategy – SEP 30 Expiration

Posted by mounddweller on September 22, 2011

Fellow Traders,

Below are the selections from our screen of weekly option which will expire on September 30.  The past couple of days of market turmoil have made it hard to be objective in selecting trades that you can feel confident will expire OTM.  Thus, this week I only have 3 selections out of a total of 119 opportunities..  My selections are not necessarily ones I feel confident will finish OTM.  Rather, they are ones I would feel confident holding no matter what their market price is on September 30.

Best of luck to everyone trading this week.  Be safe out there.

Regards,

Troy

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