The Money Tree

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Posts Tagged ‘SUNE’

Portfolio Update – September 2013 Results

Posted by mounddweller on September 30, 2013

Fellow Traders,

The 3rd quarter is officially history.  Given the impact of a so-so economy and the political antics in Washington it should be interesting to see how we finish out the year.  Most of what I’m currently reading says to look for a big run-up to the end of the year after Congress gets done trying to get our attention on the budget debate and the debt ceiling.  Stay tuned it should be interesting!

Enough of that, let’s take a look at how The Money Tree made out this month.

Number of Closed Positions: 9

Profit on Closed Trades: $1,418.22

Total Capital Used on Closed Trades: $91,073.63

Average Number of Days Trades Were Open: 124.7*

Return on Invested Capital: 1.56%

You’ll note the average number of days trades were open is much higher than usual.  That’s because I finally closed out my position in SUNE (formerly WFR).  I had that position for well over 2 years.  We’ll talk more about SUNE later in this article.  Excluding SUNE, the remaining 8 closed trades had an average holding period of 33 days.

Let’s dig a little deeper into these 9 closed trades.  Seven of the nine closed trades involved naked puts.  The remaining two were covered calls.  All nine closed positions were the result of the options expiring OTM.  I had puts expire in ABT, CAT, CCJ, EXC, LNCO, MSFT, and TEVA.

I sold the ABT SEP $34 puts when the underlying was trading at $35.29.  ABT continued to fall and was ITM for some time before recovering and finishing OTM.

I sold the CAT $80 puts for $0.72 when the underlying was at $82.38.  At expiration CAT was at $84.75.

While CCJ was at $19.54 I sold the SEP $19 puts for $0.50.  At expiration CCJ was at $19.38.

I sold the EXC SEP $30 puts at $0.60 when Exelon was at $30.20.  The puts expired OTM with EXC closing at $30.13.

LNCO was at $25.55 when I sold the SEP $24 puts for $1.30.  At expiration LNCO closed at $29.04.

My trade in MSFT also turned out well, I sold the SEP $30 puts at $0.25 when MSFT was at $31.42.  They expired OTM with Microsoft trading at $32.79.

My final NP trade involved TEVA.  As regular readers know, I’ve been trading this one for several months now.  Once again I sold the SEP $37.50 puts; this time for $0.50.  At the time TEVA was trading at $38.81.  At expiration it closed at $37.72.  If you haven’t taken an opportunity to look at TEVA before, I highly encourage you to do so.  I’ve been trading it since late April and it has treated me very well.

Now let’s look at my two covered call trades.  First up is my trade in KO.  Back on August 23rd I bought KO for $38.42 and concurrently sold the SEP $39 calls for $0.34.  On September 12th KO went ex-dividend making me eligible to receive the $0.28 dividend.  With KO trading at $38.94 on expiration day I decided to roll my calls out into OCT.  Doing so gave me an additional net credit of $0.62.

Last, but certainly not least is my covered call trade in SUNE (previously WFR).  Long time readers know I’ve been in this position for quite some time.  NO MORE!  I closed out my SUNE trade on 9/25.  Over the course of 2+ years I had managed to work my net cost basis in SUNE down from $10 (the strike price of my original puts) to $7.74.  After my SEP $9 calls expired OTM I decided to keep a close eye on SUNE and sell my shares at $8 or better.  Last Wednesday, I got my chance and sold SUNE for $8.10.  My annualized ROIC was a laughable 1.91%.   However, I’m still proud of this trade because I stuck with it, didn’t give up, and worked on it until I was able to exit with a profit.  With more experience under my belt and better stock selection I hope to avoid a repeat performance.

 

Now let’s look at my open trades.

Number of Open Positions: 7; 4 naked puts, 2 covered calls, and 1 call purchase

Net Cash Flow in September from 4 new naked put Open Positions: $591.70

Cash Flow from 2 covered calls: $288.50

Capital Used on Open Cash Secured Naked Put Trades: $36,350.00

Capital Used on Open Covered Call Trades: $24,313.90

Capital Used on $VIX call option purchase: $760.00

Net Cash Flow on Invested Capital: 1.43%

I have previously opened positions in GDX, and KO.  My new open positions are in ABT (OCT $33 puts), CCJ (OCT $19 Puts), EXC (OCT $30 puts), TEVA (OCT $37.50 puts), SYY (CC OCT $32), and $VIX (DEC $13 calls).

Going into October I am considering an additional trade in CCJ (OCT $18 puts), and new trades in CAT (OCT $80 puts), CLX (OCT $80 puts), GIS (OCT CC trade, stock goes ex-dividend on 10/8), T  (OCT CC trade, stock also goes ex-dividend on 10/8), DE (OCT $80 puts), and PG (OCT $75 puts).

Regards,

Troy

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Results – August 2013

Posted by mounddweller on August 30, 2013

Fellow Traders,

Can you believe it’s already Labor Day weekend?  Where has this year gone?  All of the big boys on Wall Street will be back from the summer homes in the Hampton’s next week.  It should be interesting to see how we finish out the year.

Well, let’s take a look at how The Money Tree made out this month.

Number of Closed Positions: 6

Profit on Closed Trades: $1,040.15

Total Capital Used on Closed Trades: $43,133.73

Average Number of Days Trades Were Open: 21.2

Return on Invested Capital: 2.41%

Let’s dig a little deeper into these 6 closed trades.  Four of the six closed trades involved naked puts.  One was a covered call and the sixth one involved the purchase of calls; something I’d never done before.  The four naked put trades all expired OTM.  I had puts expire in EXC, LNCO, MSFT, and POT.  I sold the EXC AUG $30 puts at $0.40 when Exelon was at $30.55.  The puts expired OTM with EXC closing at $30.16.  LNCO was at $29.63 when I sold the AUG $27 puts for $0.60.  At expiration LNCO closed at $27.63.  My trade in MSFT also turned out well, I sold the AUG $30 puts at $0.39 when MSFT was at $31.06.  They expired OTM with Microsoft trading at $31.80.  My final NP trade involved Potash (POT).  With POT trading around $29.08 I sold the AUG $27 puts at $0.32.  Potash, at expiration, closed at 30.39.

Before we move on to my open trades let’s look at my two trades involving calls.  First up is my covered call trade in SUNE (previously WFR).  Long time readers know I’ve been in this position for quite some time.  Recently it has become more volatile and I’ve been able to take advantage and sell some calls to reduce my overall net cost.  This month I sold the AUG $10 calls at $0.68 when the stock was at $9.95.  I ended up buying back the calls for $0.02 after SUNE announced horrible quarterly results which drove the stock price down to $7.20.   After the stock recovered I sold another round of calls at the $9 strike.  More about this trade next month.

Last, but certainly not least, I want to briefly describe the purchase of my first call trade.  I entered this trade after reading about the strategy developed by my friend Teddie at www.fullyinformed.com.   It involves the purchase of calls when the $VIX drops below a pre-defined level.  I bought 5 OCT $13 calls on the $VIX at $4.30.  Later, when the $VIX was still languishing I bought another round of calls.  This time I bought 2 OCT $13 calls at $3.10.  This brought my average cost down to $3.98.  Earlier this week I sold the calls for $4.40.  My ROIC on this trade was over 10%.  However, I could have done even better if I had spread out my purchases into smaller lots at lower prices.  Also, as it turns out I exited the trade too early.  Today, the $VIX OCT $13 calls closed at $5.00 bid / $5.30 ask.  I’m not complaining though.  I made over 10% in 34 days.  When the conditions are right I will do this trade again.

Now let’s look at my open trades.

Number of Open Positions: 10 (in 9 stocks)

Net Cash Flow in August from 8 new Open Positions: $1,279.40

Total Capital Used on Open Trades: $76,152.78

Net Cash Flow on Invested Capital: 1.68%

I have previously opened positions in GDX, OKE, and SUNE.  My new open positions are in ABT (SEP $34 puts), CAT (SEP $80 puts), CCJ (SEP $19 Puts), EXC (SEP $30 puts), KO (SEP $39 CC), LNCO (SEP $24 puts), SUNE (SEP $9 CC), and TEVA (SEP $37.50 puts).

Going into September I am considering naked put trades in IBM, INTC, MCD, and POT.

Regards,

Troy

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Results – July 2013

Posted by mounddweller on July 31, 2013

Fellow Traders,

July is history.  Wow, 2013 is going quickly.  July turned out to be a good month.  Let’s check those results.

Number of Closed Positions: 7

Profit on Closed Trades: $1,272.00

Total Capital Used on Closed Trades: $71,350.00

Average Number of Days Trades Were Open: 24.6

Return on Invested Capital: 1.78%

Let’s dig a little deeper into these 7 closed trades.  All 7 of the closed trades involved naked puts.  Six of the seven expired OTM.  The other one was my ‘day-trade’ in POT which I wrote about yesterday.  I had puts expire in CHRW, CAT, KO, TEVA, and two positions in LNCO.  I sold the CHRW JUL $55 puts at $1.10 when CHRW was at $55.97 (it has strong support at $55).  The puts expired OTM with CHRW closing at $60.60.  CAT was at $83.86 when I sold the JUL $80 puts for $1.00.  At expiration CAT closed at $85.65.  My first time trading KO also turned out well, I sold the JUL $38 puts at $0.40 when KO was at $39.54.  They expired OTM with KO trading at $41.09.  Last up are my two trades in LNCO.  With LNCO trading around $30.70 I sold the JUL $27.50 and JUL $25 puts at $1.05 and $0.55 respectively.  It was a wild ride.  LNCO dropped to an intra-day low of $23.03 on July 5 before recovering to close on expiration at 32.18.

Now let’s look at my open trades.

Number of Open Positions: 7 (in 5 stocks)

Net Cash Flow in July from Open Positions: $(110.45)

Total Capital Used on Open Trades: $65,662.93

Net Cash Flow on Invested Capital: (0.168%)

Currently I have open positions in EXC, GDX, OKE, MSFT, and SUNE (WFR).   Let’s look at each one starting with EXC.  I just can’t seem to find the right rhythm with EXC.  If I weren’t wanting to re-establish a long-term position in this company I would have given up long ago and moved onto trading something else.  Long time readers will recall that I had a position in EXC that got called away in 2012.  Since then I have been trying to build a new position.  In May I started by selling the JUN $34 puts.  As EXC continued to move up more I feared having it run away from me so I lost my patience and bought 200 shares at $35.55 only to see it begin to fall almost immediately.  I ended up having to roll the JUN $34 puts out and down to JAN $33 for a small credit.  Then in June I sold more puts at the $32 strike.  As these went ITM I rolled them down and out as well to the JUL $31 puts.  When the JUL $31 puts went ITM I decided to cut my losses and bought to close them for a small debit.  Again, my patience cost me.  EXC bounced and closed at JUL expiration above $31.  Had I been more patient they would have expired OTM.  Finally, to finish the EXC saga for this month, today I sold some AUG $30 puts at $0.40 in an effort to reduce the debit I created when I closed the JUL $31 puts too early.  All of this activity has put me at just about at break-even.  The only one getting rich on this trade is my broker.

Let’s move onto my remaining open trades.  I won’t bore you with any more details on GDX.  It continues to hover between $26-$28.  I am way under water on this trade.  Next up is OKE.  Like, EXC I’m having trouble figuring this one out.  This is another company I’m trying to establish a long-term position in.  Back in May I sold JUN puts at the $47.50 strike.  Shortly thereafter the bottom fell out on the stock and I ended up rolling my position down and out to the JAN $45 puts for a $0.30 net credit.  Then in June I sold another round of JUL puts at the $42.50 strike.  When OKE fell below $42.50 I decided to close that position and began looking to sell something else further out and down for a credit.  Alas, like with EXC, had I just been patient the JUL $42.50 would have expired OTM.

OK, not all of my open positions are basket cases.  I actually have two open positions that are performing well.  I am short MSFT AUG $30 puts.  I opened the trade on July 19 selling the AUG $30 puts for $0.39 while MSFT was at $31.06.  I have no reason to believe these won’t expire OTM.

My last open position is in SUNE (WFR).  You’ll recall last month that I mentioned that I had sold the JUL $10 calls at $0.25.  These ended up expiring OTM so I wrote another round of calls for August also at the $10 strike.  I was able to sell these for $0.68.  SUNE has been on both sides of $10 this week so time will tell if I’ll get called away at expiration or be able to write another round of calls.

 

Going into August I am considering another round of naked put trades TEVA, CAT, CHRW, and CCJ.  All are once again approaching key support levels.

Regards,

Troy

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Results – June 2013

Posted by mounddweller on June 29, 2013

Fellow Traders,

Another month has flown by exceedingly fast.  It has been a bumpy ride what with the mini-correction.  Let’s take a look and see how I did.

Number of Closed Positions: 2

Profit on Closed Trades: $235.10

Total Capital Used on Closed Trades: $20,050.00

Average Number of Days Trades Were Open: 31.5

Return on Invested Capital: 1.17%

OK, before I move on to the stats for my open trades, let me tell you a little more about these closed trades.  Both of the closed trades were naked puts.   Both expired OTM.  My first trade was Merck (MRK).  I sold the JUN $44 puts back on May 9 for $0.64.  At the time MRK was trading at $45.33.  It peaked at over $49 in early June and is now heading back down and approaching resistance.  I’ve got it on my radar screen and will definitely trade it again once it gets a little lower.  Friday it closed at $46.45.  My other closed trade was in TEVA.  On June 3 I sold the JUN $37.50 puts for $0.42.  At the time TEVA was trading at $37.97.  I have been trading the TEVA naked puts at the $37.50 strike price for 3 months now.  It is trading at multi-year lows and I’d like to establish a long-term position in it.

Now let’s look at my open trades.

Number of Open Positions: 11 (in 8 stocks)

Net Cash Flow in June from Open Positions: $1,104.00

Total Capital Used on Open Trades: $112,012.93

Net Cash Flow on Invested Capital: 0.99%

This month I opened five new positions in CAT, CHRW, KO, OKE, and TEVA.   All are naked put trades.  I’m short CAT with the JUL $80 puts, CHRW at JUL $55, and KO at JUL $38 (first time I’ve ever traded KO!).  I opened a second position in OKE at JUL $42.50.  You’ll recall last month I sold the JUN $47.50 puts.  More about that later.  And last but not least I opened another round of TEVA JUL $37.50 puts.

Now let’s look at the 6 open positions I have that were carried over from prior months.  I still have my two deep ITM positions with GDX.  I’ve dug myself quite a hole in this one.  It will take quite some time to get back to even on these.  I’m short the SEP $41.50 puts and long stock which was put to me a couple months ago at $40.  I also have a previously opened position in OKE.  I originally sold the JUN $47.50 puts back in May.  I have since rolled these down to $45 and out to JAN.  I’ve also had to roll my two positions in EXC.  I rolled my JUN $34 out to JAN $33 and my JUN $32 out to JUL $31.  My last open position is a very old one.  Way back in May 2011 I initiated a trade in WFR.  Eventually I had the stock put to me at $10.  My position has laid dormant for quite some time as I was way under water.  Well, patience is a virtue.  The stock has now come back into favor with the boys on Wall Street and I was able to sell a JUL covered call at the $10 strike price.  By the way, WFR recently changed their name and their ticker symbol is now SUNE.

Going into July I am considering new trades in IBM and a repeat trade in MRK (as I mentioned above).

Regards,

Troy

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