38 results for tag: trade


One-tenth of one percent a day

.....in new cash. That is the goal of my options portfolio, which is run like a very tiny insurance company. I get paid to accept a defined amount of risk for a defined period of time, exactly like State Farm. Learn to run your portfolio properly, and it will be a small business with cash flow. You do not have to predict the future, just manage it. Today, the market is down again. Nothing new and I don't care. I care about just one thing - Can I create my cash flow goal for the day? I'm 2/3 of the way there and working on rolling a Facebook option position. That roll is a few cents away from being filled, so it will happen and I will be done for ...

XLP, WMT, Jan 12

XLP was mostly unchanged today, so we did not try to add to this position. The 4 contracts in our small portfolio (under $4k account) are starting to earn a little profit. This is exactly what we expect for a vertical that is about 5 weeks from expiration. We are waiting patiently for time decay to work it's magic on this position. Patience Produces Profits. Our short WMT puts were expiring in a few days. We placed an order to close them at 5 cents, and it was filled. Entering a closing option order at 5 cents or less is commission-free at ThinkOrSwim. We originally sold the put contracts at an average price of 45 cents, closed them at 5 cents, ...

End of the week Jan 8

Our WalMart (WMT) trade worked well this week. We sold cash secured naked puts at an average price of 45 cents and they expired. We kept the entire profit on our 3 contracts, or $131 after commissions/fees. This is the best possible result for a weekly trade. It does not often happen so don't assume that you can do this week after week. Most trades need adjustments and rolling forward (more time) to work out profitably. Trading options is work that requires planning and patience. It is not gambling! We will watch WMT for a day when it is down at least 1% and then sell naked cash secure puts again. Subscribers get those trade alerts before they are ...

Resolution

Yesterday, we talked about the Apple and WalMart positions. Today, we have resolution of those two positions. The three short WMT 76 puts will be allowed to expire so that we will keep the entire $72 that we took in when they were sold. As I write this, there is one half hour left to the market close. WalMart is trading around 77.40 so we are nowhere near the $76 strike price. Yes, we could buy them back now for a penny or two and remove all risk. There is nothing wrong with taking that path and many traders would have rules in place that require the closing of the position. We are sitting on  plenty of cash, so the tiny risk of assignment (if the ...

Finally able to write again….

It's hard to believe that my last post was 5 months ago, but it was! My wife and I were building a house and it became crunch time. If you've never built a custom home - there is only one way to do it. You just have to be there -- as much as possible. The house is done and we are living in it now. My new office is still a pile of boxes, but I have a temporary desk that is workable enough to get me back to work -- because in the world of options, there is always money to be made! Somehow, even though I wasn't able to write, I was able to make time for trading. My Apple options trades continued, and I'm now up about $10,000 on AAPL for the year and up ...

Our Green Apple.

On April 4, AAPL had moved down more than 10 dollars from it's high just two days earlier. After being out of this symbol for a couple of months, I decided to get back in. I sold the 530 put for $5. Apple continued to move down over the next few days, and on April 8 I sold the 520 put for $5. Three days later, on expiration Friday, I rolled the 520 for one week collecting $5 and rolled the 530 for 2 weeks, collecting $9. At this point, for these two contracts and the subsequent rolls, I had taken in $2400. Now the patience came into play. I had to leave these two position alone and wait, but not all that long. One week later, on the 17th of April, I ...

Made any money trading Apple options?

It's not easy. Apple gets so much media attention that it will really mess with your thinking. One talking head loves it and is buying it, another thinks the company is dead and slowly going away. As each one of them is interviewed on TV, the price jumps up or falls down, and the casual trader gets whipsawed. It took me a long time to figure out how to trade Apple and I've made $6000 so far this year by using a very simple system. "Patience produces profits" - wise words of a stockbroker friend of mine years ago. I apply those words to trading Apple. I've tried many techniques to trade the moves, and have decided that, for most people, it's just not ...

The 3 Choices

Buy, sell, hold. As a trader, these are your only 3 choices, all the time, for every position. There are 3 possible results, too. You profit, you lose, you break even. The number 3 is the single most important number for a trader. The Monty Hall Problem refers to the game show, Let's Make A Deal. In the game, you are confronted with 3 doors. You have one opened for you - and then you can keep what's inside or give that prize back and switch to another door. Your hope is to improve your position with the second choice. The Monty Hall problem proves, mathematically, that your chances of success are increased when you switch doors after the first ...

WalMart profits continue to build

We are now up over $350 since the inception of this trade string. Our position is net 500 shares to the long side and the daily time decay (Theta) is $21 a day. Our Delta is near zero, so market risk is completely under control. This trade took a long time to get to a profitable structure but now we only have to manage the position. There were six transactions in WMT this week, so let's review: On Monday, we sold the Weekly 79 put for 36 cents. Later on Monday, we sold another for 42 cents. Then we sold the 80 put for 60 cents on Wednesday. Prices change every day, and this week the changes were in our favor. Today, we closed the two 79 puts for 5 ...

WalMart – $2600 in profits since Feb 10!

We are now up over $2600 since the low of our position around February 10, when WMT closed at $73.76. It's stock price has moved up about $5 since then, and our ongoing position is making over $200 a week with a low-risk structure. Out Delta is kept near zero, today it is 10 (Beta Weighted to the DIA). Our daily time decay, or Theta, is $46 and the position consists of some short stock and a collection of short puts. The plan is to continue trading the position for income. Currently, we are short 300 shares as a result of selling some uncovered calls earlier. We are going to work today, Friday the 25th, to sell some ITM puts that will close that ...