Monday, July 18, 2011


What a Weekend! Friday (actually Saturday) was option expiry and several of my short "naked" puts expired -none ITM, so I did not have to take on stocks, although I would not have minded. These July puts: SCCO,HCN,INTC,LLY,TAL, not only brought in several hundred $$, but were a reminder that their ex-D dates were approaching, so whatever extra money in accounts will be spent on buy/writes.
EXC - actually Exelon - was a stock I did a B/W on in Aug. 2009, so I thought holding it 2 years was enough, espec. after Japan. As outlined in my talk Saturday morning to the SF Options Group , the "reversed" annualized return (instead of the normal doubling or tripling of partial year %- I cut it in half for 1 year)was 8.12%.
Cost was $4996 (actually less when discounting the call sold); dividends (9) were $477, net calls sold (after buybacks/rollouts)were $1439; stock was called at my last call strike of $39, or $3891 net of commissions. Net return:$811 or 16.2% over 24 months - a record, beating INTC's 17 month hold. Peace of mind (almost like a 2-year CD):PRICELESS
EXC was not a one-off event for having a stock drop several points after the B/W and still making money; another example was NUE, Nucor, which I illustrated in a magazine article for : coming out July 25. Also dropping ten points.
I'm also having my book -Zero (IN) Tolerance -converted to an eBook next week, cutting the price by 1/2.
Next Thursday, the 28th, the TSAA is having a very civilized luncheon at Alfred's with a speaker from ETF Universe, Matt Hougan, who is also at the Money Show in August. See for details of Alfred's. Universe was also mentioned in the Barron's expansive coverage of ETFs this weekend.
I also learned some things at my talk Saturday, including TOS (ThinkorSwim) has a capability to reverse or close out a buy/write which could ameliorate the Bear market danger of DITM with a stop order; otherwise spending a few cents on a OTM put (making a COLLAR)would be safer.
Also, a couple DITM websites were suggested to me: and for put-selling.

No comments:

Post a Comment