RARE POSTING

The reason this Zero blog has been idle recently is  that with the market virtually unchanged for the past 19 months, DITM positions are also the same, except for option rollouts. Mostly I have been following gold and hedges with UVXY (which decays like an option).

NUGT is a gold triple strength ETF, 3 X the GDX gold miners. It is as volatile on the downside !! as the upside, which has leaped from around $20 (where I first bought it) to its current 160 level just within this year (6 months). Not unlike DITM, I have been walking up ITM covered calls, milking the huge IV (premium) at 26, 50, 60 and now 110.
With the UVXY, I have recently been selling puts to take on this double-strength hedge, in case of a severe downturn in the stock market. This is the second longest Bull market, is in the danger cycle of the year, and the wrong sectors seem to be leading it.  With the futures rollovers, however, it is a  wasting asset, which, like the TVIX, go to near zero and do a reverse split.

Handle these with extreme care!! 

BOOK 'EM DANO

Shades of Hawaii 5-0.
I just closed out my Barnes 'n Noble Leap Strangle. It was going fine but in August they spin off some Education part - BNED, which makes options even messier (covered calls, puts). Nice profit for just over i year - 28+%. Plus the safety of having brought in $$ to hedge. (Does not include margin sequester for the put - only the stock cost.).
Did take minor losses on CHK (oil) and FCX (copper) - as China sells commodities to raise cash for the $4T market loss (Their GDP is  only $10T.

GOOD NEWS, BAD NEWS

A couple of trades this week to avert disaster. The chart on Intel looks as bad as many dividend-paying stocks that are being sold now (per Barron's top 50 dividend payers were down 6%, bottom 50 are up 6% YTD). Plus INTC's future doesn't look to rosy. Sold the stock for a slight loss, but thanks to DITM and a put rollup, I made a profit overall of nearly 3% in 9 months.
Not so good on my Leap Strangle of FCX , put on in Jan. of this year. Again, the future of commodities, along with global economies, looks longer term than expected - China, Europe, et.al.
Overall loss was $1100 on 200 shares with the stock down over 6 points. Strangle saved me about $200, as I had to buy back the put much higher, and the dividend was cut.

TORPEDO AHEAD

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Another disappointing security was just sold, minimizing the loss with dividends and ITM calls: Century Tel (CTL).
Bought 200 shares at 40.54, and gave up today with huge Insider Selling (Form 4), despite B rating by Schwab and 5 star by S&P !! Sold at 32.28 ($1669 loss) ameliorated by $700 div'ds and calls sold, for a loss of $975. Better than just owning the stock and watching it drop.
Once again DITM not only enhances return, but minimizes losses.
Current positions include VZ, CVX, INTc, GM, GG, UVV, VNR (partially called away).

With record numbers of dollars coming out of Money Market Funds, mostly into the crowded trade of short term bonds, anyone who has a minimal knowledge of covered call options and/or an interest in hedging stock market exposure might want to check out: brentleonard.com for an alternative strategy that is low-risk as well as highly rewarding. For those of you wanting more details and actual trading results, a new book is available for $14.95 at Amazon.com: Zero (IN)Tolerance 

NUGT update

Having stayed with the triple strength GDX etf from my Buy price of $35 to below $10 !! , after buying back my 40 call, I just today resold a 2017 LEAP call - the 25-strike for $7; IV (Implied Volatility) is still @100. NUGT's underlying - GDX- is an etf on the best of gold stocks, so shouldn't go away like a bad stock. To me it appears oversold with juicy volatility - a good way to play an eventual gold rally.
Another way is just to buy the GGN, yielding 11% while you wait - also oversold.