SSO - Close Position


Written on January 29, 2009 – 12:50 pm | by admin

For those that have been following along, you know that I have been trying to average into an SSO position as the market moves down.  Last week I bought 6 shares at both the $21and $22 levels.  Yesterday, I sold them as the market ripped higher.  I sold them at $23.88 and since Zecco has no commissions, I netted the entire gain.  While it was only a $28.56 return, it was still over 11%.

Since I still don’t want to commit to an entire SSO position at this level/market feeling, I have put limit orders back in to buy more at the $22 and $21 levels.  I still have orders in all the way down to $14.50 (should we get there).

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EEM - Update Position


Written on January 26, 2009 – 1:11 pm | by admin

Last Friday I made the decision to sell a lower strike price for my EEM.  I put an order in to sell the Feb $25 and it was taken on this mornings pop.  If I were to get called away at $25, I would be at a 3.17% loss for the position.  This is the first call that I have sold that would result in a loss if called away so it will be a test in managing the position.  Hopefully, it closed the option period right below $25 and I can resume selling calls that would result in a profit.

Purchased: 100 @ 27.10
Initial Option Income: $1.08
Feb Option Income: $0.60
Other Option Income: $0.00
Expected Return: -3.17% (-17.58% annually)
Last Period Expected Return: 2.53% (34.91% annually)
Option periods held: 2

* All return after buy and sell commissions
** Last Period Expected Return is the return I would have gotten if my option was exercised instead of expired. 

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Posted in Rick Position - Update | 1 Comment »

SSO - Update Position


Written on January 22, 2009 – 12:44 pm | by admin

Last week I said I was going to scale into a position in SSO until I felt the time was right to turn it into a covered call.  Shortly after I bought my first shares at ~$22, the market rallied and my shares went up 6%.  Since this was in my Zecco account, I didn’t have any commissions and so I sold them.  If anything goes up 6% in that short of a time, I need to take my profits.  Especially since I didn’t trust any rally.  Since I sold them, I put my order to buy 6 shares back in at $22.

Turn the page a few days and on Tuesday I was filled on two orders: 6 @ $22 and 6 @ $21.  Since I was busy at work yesterday, I didn’t see until after the market closed that my position was up over 6% once again.  Had I seen that at 2:45CST, I would have sold out.  (Take the money when the getting is good).  I was kind of glad that I didn’t see it because I thought this would be a multi-day rally, especially once I saw the Apple earnings after the bell.  Well, today everything is down again and I’m holding my position.  As for filling out my 100 shares, I still have my orders in at $20 and below.  I will keep you updated as I manage this position.

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January Expiration Wrap Up


Written on January 20, 2009 – 1:24 pm | by admin

I am going to start providing a month end review of what transpired.  I will not show details of individual trades here because I am going to get a real-time position page up and running soon.  Don’t worry, it will also show my closed positions.  This is going to be an evolving process so this is just a start.

Existing Positions on December 22, 2008: SSOx4, UYG
Positions Opened During Period: 5
Positions Closed: 3 (2 closed by me selling the position at a gain)
Option Premium Generated:  $1,398 ~ 5% of portfolio at start month
Positions Open after Expiration: SSOx3, TBT, UYG (ugh), EEM, AA

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AA - Update Position


Written on January 20, 2009 – 12:17 pm | by admin

I sold some Feb $10 calls on my Alcoa position.  I’m not waiting for better premiums for one main reason.  My annual percentage return went up for the price I sold them at today and I’m hesitant that we will get much of a bounce.  I would rather lock in a good return and have it rocket to $20 than to wait and have the stock drop to $5.  I’ll take my money now please.  I did make the rookie mistake of selecting the wrong order type so I am adding the extra commission to this position since its the stock I made the mistake on.  I bought 2 contracts to open instead of selling them to open.  

Purchased: 200 @ 11.67
Initial Option Income: $1.95
Feb Option Income: $0.37
Other Option Income: $0.00
Expected Return: 5.27% (36.11% annually)
Last Period Expected Return: 2.31% (31.60% annually)
Option periods held: 2

* All return after buy and sell commissions
** Last Period Expected Return is the return I would have gotten if my option was exercised instead of expired. 

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USO - Open Position


Written on January 20, 2009 – 9:44 am | by admin

My Jan position got called away so I am going back to the well with USO.  This time I went one strike farther down.   The details:

Buy: 100 @ $30.41 ($7 commission)
Initial Investment: $3048.00
Sold: $27 strike @ $4.60 ( $8.25 commission)
Net Investment: $2596.25
Expected Return: 3.04%

I am ok with holding this for a while since I have good downside protection (>10%) and I believe oil will come back with a vengeance once the world economy gets back on track.

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TBT - Update Position


Written on January 20, 2009 – 8:58 am | by admin

I had a limit order in to sell Feb $42 calls @ $2 each.  Somehow it hit this morning and I got it off.  That premium really gives my position a kick in the pants (annual percentage wise).

Purchased: 100 @ 42.50
Initial Option Income: $1.40
Feb Option Income: $2.00
Other Option Income: $0.00
Expected Return: 6.08% (42.52% annually)
* All return after buy and sell commissions

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SSO - Open Position


Written on January 15, 2009 – 9:31 am | by admin

Into this market downturn, I am looking to build a 100 share position in my Zecco account.  I chose this because I can buy in small increments and not get hit with commissions.  I have in place a bunch of orders to try and accumulate shares should the market start to free fall.  I bought my first 6 shares today at $21.99.  I have orders that increase in the number of shares as the price falls.  Once I feel comfortable holding the shares, I will purchase the remaining shares to get me to 100 and then start the covered call process.  I feel that averaging down like this is best especially in this kind of market.  If the market bounces and this is it, I have some bought really low and if it falls, I don’t have as much at risk.

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Hedging


Written on January 14, 2009 – 12:56 pm | by admin

As you may know, I puchased a long dated SPY put (Sep $80) a week or two ago for $6.20.  I decided to do this because the biggest thing I learned from all the turmoil in the last year is that never be unprepared for a market catastrophe.  To me this means holding some long dated market OTM puts.  I will be looking to keep this as part of my portfolio for the forseeable future.

Since I bought my put, the SPY had gone almost 50-60 points before today.  During today’s drop and explosion in volatility, I sold my put for $10.20 (67% after commissions).  As it stands right now, I have sold at the low of the day.  I don’t expect this to be the ultimate bottom but after making 67% in a few days, I have to take it off the table.  If I had bought more than 1 contract, I would have sold half and left some of the play on.  I do believe that the market is going to bounce (not to 9000) before it re-tries the lows and so I may look to re-enter at that time.  

Hedging isn’t for everyone and most of the time I will just lose money but for the next time that Oct/Nov 08 happens, I will be prepared.

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UYG - Position Update


Written on January 13, 2009 – 1:01 pm | by admin

Today I bought back the Feb $7 calls that I sold against my 200 shares of UYG.  I sold them at $0.55 and bought them back at $0.15.  I did this because I feel the market is at a depressed state and I can sell them again at a higher price.  I have an order in to sell the calls again but I’m not sure it will get there without a decent rally.  I may also look to average down on my position to help out with the cost basis quite a bit.  Here is where I stand now:

Purchased: 200 @ $8.01
Initial Option Income: $1.20
Feb Option Income: $0.55 - $0.15 = $0.40
Other Option Income: $0.40
Expected Return: 9.99% 
Expected Hold Time: 4 option cycles

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