Since the start of the cyclical Bull Market of March 2009 (and the start of my DITM strategy the following May) there have been 9 corrections of 5% or more - as of today's low. Including the Flash Crash of May 2010, the strategy has sustained only 3 losses, 2 of which regained some ( BP and TLT )- only the UVV trade was a large plunger. This is over 100 round trip trades, and no losses have occurred in more than a year.
Currently of my 22 positions (fully invested) 14 are safely above water - 8 slightly below. Half of the belows are naked puts which:1) take me up to ex-dividend date 2) add to total return and 3)alert me that the date is imminent, whether the put is ITM or OTM. Upcoming very profitable candidates include LO and MAT.
This has been a very interesting summer so far. In hopes of finding a fund that I could subadvise on to get a pure results reading, I attended a very civilized Schwab dinner at the swank Omni hotel, put on by US Global funds; Thursday, the TSAA held a luncheon at Alfred's hosting Matt Hougan from IndexUniverse.com, an ETF analyzer who will also be at the Money Show.
Also this week I was happily informed that my magazine article on DITM came out in tradersonline-mag.com - an English version of the German trading and T/A Zine; also the eBook version of Zero(IN)Tolerance purportedly arrived at screens such as Nook, iPads, Sony, etc. - everyone except Kindle, which may happen in December.
BTW, I would appreciated any feedback about accessing the eBook, as I do not have an eReader. Although successful in bringing it up on the iPad and Nook -both were prices, 2010 dates and ISBN# from my Print book.
The Money Show is August 10 through 12, with Tom Hudson and Hilary Kramer from Nightly Business Report; Charles Biderman, Harry Domash of Dividend Detective and the SF Chronicle; also the TSAA and GGU will have a booth there, and a room on Thursday evening.
This debt decline poses a possible great opportunity to initiate some DITM trades, starting with the DIA, which pays monthly.
Friday, July 29, 2011
Monday, July 18, 2011
"EXC" STANDS FOR EXCELLENCE:
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 : onlinetrading-mag.com 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 TSAASF.org for details of Alfred's. Universe was also mentioned in the Barron's expansive coverage of ETFs this weekend.
DOES ANYONE KNOW OF AN ETF LOOKING FOR A STRATEGY? I'M AVAILABLE!!!
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: fullyinformed.com and borntosell.com for put-selling.
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 : onlinetrading-mag.com 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 TSAASF.org for details of Alfred's. Universe was also mentioned in the Barron's expansive coverage of ETFs this weekend.
DOES ANYONE KNOW OF AN ETF LOOKING FOR A STRATEGY? I'M AVAILABLE!!!
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: fullyinformed.com and borntosell.com for put-selling.
Wednesday, July 6, 2011
CAN U HEAR ME NOW?:
No surprise - my Verizon stock, which I dearly love, was called away the day before ex-Dividend date (today). Since I mark all my stocks ex-d and pay dates for my recordkeeping, I saw it coming but decided to let it go, as we are coming into the JASON period of the market (June through November)which not only gets a bit hairy, but I go on vacation a lot during Sept./Oct.
Since I am Bullish on year-end (as everyone else is !), I might just sell an Oct. 36 put ( stock at $37.40) to get an annualized 11% on the put and take the stock on at $36 if it falls to that, or below. That would actually be the same return as if I had rolled the Call to Oct. for $.50 extrinsic plus $.5 dividend today.
Return for the past 6 months on VZ was not that exciting, at 7.63% annualized,since it was held to full term. Bought 200 shares at $7523, got $196 in two dividends and $623 from the calls sold in January.
I'll be discussing the first 6 months' results and new tweaks (selling puts, capturing annual dividends versus quarterly) at the SFBAOG meeting on July 16 monthly expiry meeting at Fort Mason.
Since I am Bullish on year-end (as everyone else is !), I might just sell an Oct. 36 put ( stock at $37.40) to get an annualized 11% on the put and take the stock on at $36 if it falls to that, or below. That would actually be the same return as if I had rolled the Call to Oct. for $.50 extrinsic plus $.5 dividend today.
Return for the past 6 months on VZ was not that exciting, at 7.63% annualized,since it was held to full term. Bought 200 shares at $7523, got $196 in two dividends and $623 from the calls sold in January.
I'll be discussing the first 6 months' results and new tweaks (selling puts, capturing annual dividends versus quarterly) at the SFBAOG meeting on July 16 monthly expiry meeting at Fort Mason.
Friday, July 1, 2011
6 months Wrapup:
The tables below represent actual trades in the DITM portfolios. The top table consists of trades opened in '09 and '10, closed out in 2011 before July 1; the bottom table holds trades opened and closed in 2011 YTD.
PLACED IN 2010 IN 2011 FIRST 6 MONTHS
DATE STOCK STOCK DIV'D CALL STOCK TOTAL ANN.NET
.....SYMBOL AMOUNT AMT SOLD RETURN RETURN RETURN
10/14/2009 INTC 6291 184 520
INTC 47
INTC 5391 543 6.1%
5/24/2010 NOC 12147 282 1428 10991 1102 13.6%
10/18/2010 HCN 9961 276 400 9991 706 17.01%
10/20/2010 DIA 33429 378 2932 31115 922 8.27%
10/22/2010 ETN 8774 58 1109 7991 384 13.1%
11/4/2010 CVX 8478 72 646 7991 231 8.17%
11/5/2010 LLY 7135 98 598 6591 152 8.52%
11/18/2010 PEP 6484 96 555 5991 158 5.85%
11/18/2010 JNJ 6389 108 (2)689 5741 450 14.09%
12/1/2010 RYN 5024 54 612 4491 133 10.6%
12/1/2010 MRK 3489 76 345 3191 167 9.57%
11/30/2010 TLT 9924 245 600 9413 223 4.5%
AVERAGE 9.95%
PLACED IN 2011 IN 2011 FIRST 6 MONTHS
DATE STOCK STOCK DIV'D CALL STOCK TOTAL ANN.NET
....SYMBOL AMOUNT AMT SOLD RETURN RETURN RETURN
1/11/2011 SI 11881 270* 1035 12479 193 19.5%
1/13/2011 TLT 18423 124 1502 16991 194 4.21%
11/30/2010 TLT 9924 245 600 9413 223 4.5%
1/21/2011 NI 5607 69 469 5241 172 12.27%
1/21/2011 RY 10857 101 1038 9991 273 10.1%
1/27/2011 KMP 7229 0 505 6732 8 1%
2/16/2011 NVS 11309 0 350 10991 32 3.4%
2/17/2011 MCD 7614 61 509 7241 197 10.35%
2/23/2011 LO 15951 260 1686 17321 614 46.19%
3/3/2011 BTI 8069 266 214 8336 217 32.3%
3/23/2011 T 5629 0 338 5391 100 21.32%
3/23/2011 EIX 7300 64 440 6991 195 10.68%
4/1/2011 GRMN 6751 0 576 6809 57 1.01%
12/1/2010 MRK 3489 76 389(2) 3191 167 9.6%
AVERAGE: 13.32%
COMBINED AVERAGE: 11.64%
PLACED IN 2010 IN 2011 FIRST 6 MONTHS
DATE STOCK STOCK DIV'D CALL STOCK TOTAL ANN.NET
.....SYMBOL AMOUNT AMT SOLD RETURN RETURN RETURN
10/14/2009 INTC 6291 184 520
INTC 47
INTC 5391 543 6.1%
5/24/2010 NOC 12147 282 1428 10991 1102 13.6%
10/18/2010 HCN 9961 276 400 9991 706 17.01%
10/20/2010 DIA 33429 378 2932 31115 922 8.27%
10/22/2010 ETN 8774 58 1109 7991 384 13.1%
11/4/2010 CVX 8478 72 646 7991 231 8.17%
11/5/2010 LLY 7135 98 598 6591 152 8.52%
11/18/2010 PEP 6484 96 555 5991 158 5.85%
11/18/2010 JNJ 6389 108 (2)689 5741 450 14.09%
12/1/2010 RYN 5024 54 612 4491 133 10.6%
12/1/2010 MRK 3489 76 345 3191 167 9.57%
11/30/2010 TLT 9924 245 600 9413 223 4.5%
AVERAGE 9.95%
PLACED IN 2011 IN 2011 FIRST 6 MONTHS
DATE STOCK STOCK DIV'D CALL STOCK TOTAL ANN.NET
....SYMBOL AMOUNT AMT SOLD RETURN RETURN RETURN
1/11/2011 SI 11881 270* 1035 12479 193 19.5%
1/13/2011 TLT 18423 124 1502 16991 194 4.21%
11/30/2010 TLT 9924 245 600 9413 223 4.5%
1/21/2011 NI 5607 69 469 5241 172 12.27%
1/21/2011 RY 10857 101 1038 9991 273 10.1%
1/27/2011 KMP 7229 0 505 6732 8 1%
2/16/2011 NVS 11309 0 350 10991 32 3.4%
2/17/2011 MCD 7614 61 509 7241 197 10.35%
2/23/2011 LO 15951 260 1686 17321 614 46.19%
3/3/2011 BTI 8069 266 214 8336 217 32.3%
3/23/2011 T 5629 0 338 5391 100 21.32%
3/23/2011 EIX 7300 64 440 6991 195 10.68%
4/1/2011 GRMN 6751 0 576 6809 57 1.01%
12/1/2010 MRK 3489 76 389(2) 3191 167 9.6%
AVERAGE: 13.32%
COMBINED AVERAGE: 11.64%
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