Tuesday, October 29, 2013


In yet another rollup and out, I rebought the RAD (Rite Aid) put of $3 for 2015 and sold the $4 of 2016 for $.80 10 times; net profit of $576. After buying it only in Aug at $3.58 and selling the Strangle, it LEAPt up to its current $5+ prompting the rollup into a "Calendar Straddle".
Spending $3589 for the stock, I have brought in: $672,437, and now net $576, or $2357. Max loss is only $1232 no matter where it goes. Being in an IRA, I did have to sequester a $4000 requirement in case it gets put to me in 2016. As the 2015 CALL expires, I shall sell another 2016 Call. RAD pays no dividend and there is no appreciation in a Straddle (no Home Run).


Even though the Sentiment Indicators I follow are at dangerous levels - lessened by the Invisible Hand of the Fed Nonreserve, and that neither Hallowe'en nor JASON (June thru November) semi-cycle is not over, I feel the need to obvert the ZIRP policy of punitive interest rates by doing what Bernanke wants us to do- take on more risk. That said, I went back to an old fave - ERF (Enerplus) for a nice trade, with Ex-D Nov.1 - a 6% dividend for hopefully 2 quarters before the April 16 ITM call takes it away.

I also added to my LEAP profit portfolio ( I hope), with trades on both TSL and NOK; raising the put level since both stocks have run up nicely. Schwab willing, I hope to roll the 2015 NOK 2.50 put up to the 2016 $4 10 times for an additional $200 over and above the 22% return I anticipate ( the stock has gone from   $3.50 to over $7.

Likewise, I am trying to roll my recent TSL put from $7 to 10, where the call is (making it a straddle, not a strangle). I'm hoping to bring in (with a Fill) over $500, adding to the 60% expectation. TSL has gone from under $9 to its current $15.40.

Monday, October 21, 2013

Ho Hum

Due to post vacation lassitude I forgot to roll out my Vanguard Natural Resource DITM position - VNR, which was perfectly placed to do so - $28.10, while owning a covered call of $27.50 for Oct. expiry. Having owned it for 13 months, it was probably overdue, as I find the longer one holds a position and rolls out calls, the less the profit is. Still, it garnered an annualized 13.53% (14.66% for the 13 months) not including a "Present Dollar" fact that it pays MoPay - monthly- and those $$ went elsewhere.

For readers who want to know more of DITM (and LEAPS), I am giving a talk this Saturday about them in the city. If you cannot make it, the lecture notes should be posted at the SFBAOG website for paying ($30/year) members.


Friday, October 18, 2013


Now that we are in the "What Can Possibly Go Wrong" era - postponing gov't ineptitude; most of the Sept.-Oct. danger zone; tapering put off; virtually no other alternative investment - US or globally, etc. the sugar high continues as the $$ Crack continues to flow in.

That said, I still continue to hedge, with DITM and the LEAP longer term plans. I just put on a BX DITM going out to March (25 call) - nice option premium, considering a low VIX, and a 4+% dividend. Also looking at CA and CNK later in November.

For LEAPs, I'm considering KBH and PHM for the longer haul.

I hope the reader can attend the SFOG options group meetup next Saturday morning at Ft. Mason (Oct 26) for more on LEAPs and DITM.

Thursday, October 17, 2013


In another "rara avis" for DITM, it sustained a minor loss (less than just an ordinary stock trade), with Calumet CLMT losing just over $1,000. I even bought 2 Nov.1 Puts to hedge, which I'm still holding for "speculation", although CLMT - so far- rebounded off its low, after shaking me out.

In preparation for my talk to the SFBAOG ( Bay Area Option Group) on Saturday the 26th, I shall recap the last several months, back to the May market top, when DITM started going basically sideways, at least in my small IRA. More my failing than DITM's - going flat in preparation for the slow season of Sept. Oct.; my usual vacation weeks; and some bad Sector selection of precious metals and natural resources.

More on the DITM and LEAP talk next week on:


Wednesday, October 2, 2013


Final trade before going on vaca:
Bought ERF (Enerplus O&G) eleven months ago for @ $16.5, selling the April $15 DITM call  ; a week later it dropped to 11 1/2, then worked its way back to be called away Monday with the Oct.15 call I sold OTM (above the stock price, but the same as the original)
Monthly dividends plus calls on 300 shares was $800, on Cost basis of $4866, annualized for the 11 months:  17.85%