New Newsletter Maybe.

I might be partnering up with a good friend that I have been trading with for quite awhile.  He loves the success that I have been experiencing with my call writing and put selling and he wants to possible add it to his newsletter or add my thoughts and insights as a supplement to his newsletter.

In the previous post I spoke about it and now i want to give you some real updates from this weeks trading.

Danny’s update as of August 29, 2014

Date	Symbol	Shares	Price	Option	Prem.	P&L
8/11/14	CTRP
8/25/14	FSLR	200	71.34	72 C	.90	$180	Expired
8/25/14	GWPH	100	89.82	91 C	1.82	$300	Called
8/25/14	YY	200	87.75	90 C	1.25	$250	Expired
8/27/14	YELP	200	82.87	85 C	1.27	$254

CTRP is in a channel and needs to be watched to see if it pops to the upside or breaks down. So for now I have not wrote any calls. If it moves to the upside I will write calls, if it breaks down I will sell the stock out for a loss.

FSLR and YY I wrote calls again. Since this week is a shorten trading week, and if the stocks do not get a move to the upside, I will have to consider selling calls for the following week.

GWPH I re-bought the stock and wrote calls which got called away. Watch the stock to see if it holds above the short term moving averages. It has some resistance at 95.79 the 50% retracement.  This is a good candidate to re-buy and sell calls again.

One new position was put on this past week. YELP and the calls expire on 9/5.

This week net = $984

Danny’s update September 2, 2014

Date	Symbol	Shares	Price	Option	Prem.	P&L
9/2/14	CTRP	200	66.5	67.5 C	1.3	$260
	FSLR	200	71.34
9/2/14	YY	200	87.75	89 C	1.25	$250
8/25/14	YELP	200	82.87	85 C	1.27	$254
9/2/14	VRTX	100	83.08	84 C	1.38	$138

CTRP got it’s big pop today and I sold the 67.5 calls that expire next week on 9/12 at 1.30. This is like selling the stock at new highs. 67.5 +1.3 = 68.80.

FSLR is lagging but holding its 20EMA. Watch to see if it gets going. I am looking to sell the 71.5 or 72 Calls for next week. I’m long FSLR since 7/1 and I have written calls several times totaling $4. It’s nice to get paid to wait.

YY also got a pop today and I wrote calls again. They expire on 9/12.

YELP is working beautifully as the stock moved up today with a gain 2.41 and the options only moved .20. These expire this week.

VRTX is a new position and the calls expire next week. I went small due to the high volatility.

Today’s net in premiums = $648

Danny’s update September 3, 2014

Date	Symbol	Shares	Price	Option	Prem.	P&L
9/2/14	CTRP	200	66.5	67.5 C	1.3	$260
9/3/14	FSLR	200	71.34	72 C	.78	$156
9/2/14	YY	200	87.75	89 C	1.25	$250
8/25/14	YELP	200	82.87	85 C	1.27	$254
9/2/14	VRTX	100	83.08	84 C	1.38	$138

FSLR got its move today and I was able to sell the 72 Calls at .78 that expire on 9/12

Premium collected this week equals $804 before commissions.

YELP is the only option that is expiring this week. It got over 85 today, but then pulled in and closed at 83.25. This is the only position that needs to be watched on Friday.

For tomorrow I think I will take the day off. Maybe play golf, oh wait I don’t know how to play. But I will check in from time to time just to make sure that nothing crazy is happening in the markets.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Next!

Since leaving the American Stock Exchange back in 2001 and moving to  Sunny, Hot, Humid state of Florida I have tried a few other things to make a living. But before leaving NYC I went back to school and earned a couple of computer certifications which landed me my first job in the industry paying a whopping $10/hour in Florida.  I managed to work myself up to being the manager of a call center, where we did tech support for a local cable computer.  Overseeing around 20 employees, I was now earning a whopping $12.50/hour.

Seeing that this was going nowhere, I then went to get my mortgage broker license, which I did receive. Hooked up with a small company that was doing condo conversions.  This is where an investor would buy out a building and renovate the apartments to be sold as condominiums.  I would sit in a small office with a few other mortgage brokers trying to pre-approve lying bastards that wanted to buy an apartment.  We had a drop dead gorgeous secretary who would take the new prospects to see the units and then they would come back to the office and sit down with me.  One small problem more than half of the prospects could not speak english. For the first time I was let go, or as Donald would say “You’re fired”.

Then there were two other ventures.  One was my wife,s dream to own a beauty salon.  Which did not work out because slowly one by one the hair dressers were leaving us and taking their clients with them and we did not have the capital to keep the place running while we tried to get new hair cutters build up their clients.  And then we started a cleaning service.  Yup me and my wife went into people’s homes and cleaned them with our own hands.  This was actually starting to take off but after a couple of months my wife developed some health issues and couldn’t clean anymore.  We tried to find some good workers that like to clean toilets, but what was I thinking.  This is Florida.  You are lucky if they show up to work.

So I thought for a long time what else can I do to earn a living.  With 22 years experience from working on the American Stock Exchange there must be some kind of skill set I have.  I did it all there.  Runner, specialist clerk, wire clerk (also know as a phone clerk), I was even a specialist and floor broker.  But I never really traded my own money.  Never had the capital to try it.  But I had the knowledge on how markets are made, why stocks should go up or down. I understood the business. I even went to a seminar and it was helpful because it showed some of the basics on money management, and I was introduced to Japanese bar charting.  Remember I came from the trading floor where we had a basic quotron, that has a green and white screen.  It was used to get quotes and get the news. Very basic.  Charting was something traders had to do by hand after hours.  Go read “Pit Bull” by Martin Schawrtz, he will tell you.   So I raised some money and started to trade stocks and options.  I blew up an account here and there.  I even tried to follow some of these so-called gurus.  Which was a huge mistake.

I first started trading options using them just as if I was buying the stock.  I was speculating.  Why use options?  Because you need less capital to make your purchases. Instead of buying a 100 shares of a $65 stock and investing $6500 you could buy an option for a fraction of the price.  But the problem is that options don’t move dollar for dollar.  Meaning that if the stock went up a dollar the option may only move .50, .30 or even less. Especially if you were buying the out of the money options.  And if the stock went down and it took a few days for it bounce back, because we all know that stocks will bounce back, YEAH RIGHT!  The options would not bounce back as fast.   As a matter of fact the stock could bounce back be higher from your entry point, but you could still be down in the options.  How can that be?  Because time is always working against you.  If you don’t understand options then don’t try to trade them until you do.  I will, some day do an article on the basics.  As a matter of fact most options (they say 80%) will expire worthless.  Which means whatever you invested in, is now gone. Only way to make it back is to try it again and you have a 20% chance of being successful.

I’ve been managing my father-in-laws portfolio for quite a while now.  He owns some stocks, preferred stocks, and mutual funds.  But I have found that some of the stocks are stuck in a channel and are not moving.  Using my experience and knowledge on options I showed him how to generate income ever month by selling calls against his long stock positions.  They call this Call Writing. Oh I forget to tell you that 1 options contract is equivalent to 100 shares of stock.    So for example he owned 500 shares of XYZ, you can then sell 5 calls and receive $2 per contract.  Thus generating $1000 extra income for his account.

I started getting very good at this, that I finally said to myself I should be doing this for myself.  I started with a fairly small account of $50,000 non-margin and since I started back in April of 2013 my account has grown by 32%.  I am not bragging about this, but I never said that I was looking for a quick rich scheme or said that you can make some crazy returns that some gurus claim.  But I have now found a more consistent way of supporting my family.  With the addition of weekly options, I love it that I can be in and out of positions for just the week, which helps control the risk in investing.  Also options force you to take a profit on the stock.   Again I will be doing an article on the basics of options if you have no idea what I am talking about.

Stay tune for more on options and covered call writing, with a little taste of naked puts.