Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 10-20-2015, 11:59 AM   #761
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 16,535
What? No post in more than a week? Are our active traders getting all tired and quit?

I did not do any trade either, but 3 of my options expired last Friday.

A put option on an EM ETF expired worthless due to EM recovery, netting me $308. If EM market kept on tanking, I would end up having to buy another $4800 worth of EM stocks. That EM ETF has sagged, and is now under that strike price, so I got lucky here.

A covered call option on an S&P index ETF ended up being in the money and getting assigned. I lost $32 on this one due to buying the ETF too early, losing money on it so wrote a covered call just trying to recoup the money, which I did. I still have some more covered call options, but they have not expired and have higher strike prices. The shares also have a lower cost basis.

The 3rd option is a covered call on a leveraged Biotech ETF, ending up being in the money and getting assigned. This ETF and the associated option netted me $876 on a bet of $5400, entered a bit more than 2 weeks ago. A good short-term trade like this happens every so often. This ETF dropped since last Friday, and is now hanging around the strike price. Man, I am lucky again.

PS. All the gain/loss amounts above are after trading costs.
__________________

__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leo Tolstoy
NW-Bound is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-20-2015, 12:10 PM   #762
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 16,535
Quote:
Originally Posted by Brat View Post
Cramer seems to think that the market has established a floor.
Is this like Irving Fisher, an economist, who declared that the stock market had reached "a permanently high plateau" right before the Crash of 1929?
__________________

__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leo Tolstoy
NW-Bound is offline   Reply With Quote
Old 10-20-2015, 01:57 PM   #763
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,354
It is too close to biotech earnings for me to feel comfortable trading. Could see a big move either direction and I don't want to get the direction wrong. Unsure if a strangle would work either.

Solution is just holding a small amount of Gilead and Amgen through earnings. Will make a small gain or loss.
__________________
Fermion is offline   Reply With Quote
Old 10-20-2015, 03:45 PM   #764
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 16,535
I have a correction to make. The EM surge was such that the cash-covered put option on an EM ETF that I made $308 on had its strike price 23% under the Friday price. So, there was no danger of it getting exercised. Also, the cash held to back up that option was $5200, not $4800 as stated earlier.

I looked back and saw that at one point the EM dipped enough that the options could get exercised and I would have to spend $5200 to buy a stock worth only $4400. After accounting for the $308 premium, I would have lost $492.

Yep, it's not easy nor risk-free to make that bitty $308 using a capital of $5200.

Quote:
Originally Posted by Fermion View Post
It is too close to biotech earnings for me to feel comfortable trading. Could see a big move either direction and I don't want to get the direction wrong. Unsure if a strangle would work either.

Solution is just holding a small amount of Gilead and Amgen through earnings. Will make a small gain or loss.
I still have some bear biotech ETF shares with outstanding covered call November options on them. I am sufficiently deep in-the-money that biotech has to surge 14% from here for the gain to evaporate.

At this point, I am not making any more trade as it seems things have quieted down. I am still mulling the idea of buying SPY and writing deep covered call on it to make 4-5% a year, but instead of the 1-year out option I may do a shorter duration.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leo Tolstoy
NW-Bound is offline   Reply With Quote
Old 10-20-2015, 09:41 PM   #765
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 16,535
Quote:
Originally Posted by NW-Bound View Post
I looked back and saw that at one point the EM dipped enough that the options could get exercised and I would have to spend $5200 to buy a stock worth only $4400. After accounting for the $308 premium, I would have lost $492.

Yep, it's not easy nor risk-free to make that bitty $308 using a capital of $5200...
Again, I forgot something. If the option holder exercised it when that ETF hit bottom, he would have done me a favor because I intended to hold the shares after being forced to buy it at a $492 loss. And holding it until now, I would have had a gain of $1508 instead of the stinkin' $308.

A win can turn into a loss, then back into a bigger win. It all depends on how you act. It's so much more complicated with twists and turns compared to a card game. That's why I have never gotten interested in card games, and in fact do not remember the rules for any game.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leo Tolstoy
NW-Bound is offline   Reply With Quote
Old 10-22-2015, 03:02 PM   #766
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,354
Holy crow, I just made $16,000 on Gilead. Their main competitor for HCV just got a thumbs down by the FDA. Stock jumped big time.

Doing a little happy dance here (sorry for those who own Abbie)
__________________
Fermion is offline   Reply With Quote
Old 10-22-2015, 06:18 PM   #767
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 16,535
Nice!

It has been a while since any single stock gave me a 4-figure gain (ETF and MF do not count). I guess I am too diversified.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leo Tolstoy
NW-Bound is offline   Reply With Quote
Old 10-22-2015, 07:52 PM   #768
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,354
It probably will have been my best ever one day gain until Corning gets bought out. I am holding 90 Jan 2017 $13 calls on Corning that I purchased at sub $4 each when Corning was in the low $16s recently. Today it traded 28 million shares vs 10 million normal with no news. Stock was up 5%.

If I had to guess, I think they are selling off a portion or some other such news has leaked early. A spike to $20 and I would sell all, making about a $27,000 profit.

Between Gilead and Corning, this might end up being a good year after all.
__________________
Fermion is offline   Reply With Quote
Old 10-22-2015, 10:39 PM   #769
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 16,535
Quote:
Originally Posted by NW-Bound View Post
Nice!

It has been a while since any single stock gave me a 4-figure gain (ETF and MF do not count). I guess I am too diversified.
I meant to write a 5-figure gain, meaning more than $10,000, on a single short-term stock trade.

I have some large unrealized gains on some stocks that I hold long-term. However, I rarely unload an entire position in one trade. Each of my trades, buy or sell, is less than $30K, although I do build some to a larger position in the 6-figure. But the larger positions are all ETFs or MFs, hence diversified. I stopped having a 6-figure in a single stock since the debacle of 2002-2003. It hurt too much when it crashed.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leo Tolstoy
NW-Bound is offline   Reply With Quote
Old 10-23-2015, 11:30 AM   #770
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,354
Gilead dropped back a bit and ABBV regained 5%. I am tempted to buy back my Gilead but it has not returned to the $100 area where I like to make my purchases. I guess I sit on the sidelines for next week earnings I reduced my Corning a bit today since the volume evaporated. Still made a bit of tidy profit there. Microsoft sure was a surprise. Internally they are doing nothing right but I guess the cloud is so in right now that it lifts everything.
__________________
Fermion is offline   Reply With Quote
Old 10-27-2015, 01:09 PM   #771
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,354
Quote:
Originally Posted by Fermion View Post
Gilead dropped back a bit and ABBV regained 5%. I am tempted to buy back my Gilead but it has not returned to the $100 area where I like to make my purchases. I guess I sit on the sidelines for next week earnings I reduced my Corning a bit today since the volume evaporated. Still made a bit of tidy profit there. Microsoft sure was a surprise. Internally they are doing nothing right but I guess the cloud is so in right now that it lifts everything.
Geez, Corning didn't even have great earnings and it is trading up 5% today.

So, mistakes so far...not buying back Gilead at $106 (it is over $110 now) and selling 45 Corning Jan 2017 $13 calls at $5 for a small profit (they are now worth $2500 more).

The remaining 45 Corning options maybe I will hold for long term, meaning a few weeks

Corning said they are going to do a 10B buyback. The market cap is 20B. That is a sizable buyback!
__________________
Fermion is offline   Reply With Quote
Old 10-28-2015, 12:14 PM   #772
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,354
Utrecht, any trades lately or has the VRBO thing gotten you off track? This is earnings week and this thread is unusually quiet.
__________________
Fermion is offline   Reply With Quote
Old 10-29-2015, 03:11 PM   #773
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 7,759
Quote:
Originally Posted by LOL! View Post
Sold out a moment ago, so unwound this trade which was nicely profitable. However, BND is up as well, so I will not buy it back just yet and just hold the cash instead. BND goes ex-dividend tomorrow, too.
The above quote was posted on 9/30.

It has been a while since I made any trades except for reinvesting some dividends. I did hold the cash since the last sale until today. Since today BND finally dropped to below where I last sold it at, I used up that cash to buy shares of BND. Clearly, BND has dropped because of the upcoming FOMC decision. I can live with that for now.

And I will get the dividend next week for BND. I did miss out on the previous month's dividend of about 16 cents, but BND today is about 16 cents lower today than last month anyways, so I do not believe I missed anything.

I am back to asset allocation nirvana, too.
__________________
LOL! is offline   Reply With Quote
Old 11-02-2015, 12:05 PM   #774
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 16,535
I just bought a bit of a 2x leveraged long biotech ETF, and immediately wrote a Dec call to hedge.

I have made a few $K this year playing this game with biotech, using short and long as I see fit. Not a lot of money because the amount committed is small (low 5 figures), but it is fun.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leo Tolstoy
NW-Bound is offline   Reply With Quote
Old 11-05-2015, 10:19 AM   #775
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 7,759
My purchase on 10/29 of a bond fund has not worked out at all. Not much I can do about it though.
__________________
LOL! is offline   Reply With Quote
Old 11-05-2015, 10:31 AM   #776
Moderator
aja8888's Avatar
 
Join Date: Apr 2011
Location: The Woodlands
Posts: 5,639
Quote:
Originally Posted by LOL! View Post
My purchase on 10/29 of a bond fund has not worked out at all. Not much I can do about it though.
Is this a market reaction to the word that the Fed may raise interest rates in December?
__________________
......."Everybody has a plan until they get punched in the face." -- philosopher Mike Tyson.
aja8888 is offline   Reply With Quote
Old 11-05-2015, 12:15 PM   #777
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 7,759
Quote:
Originally Posted by aja8888 View Post
Is this a market reaction to the word that the Fed may raise interest rates in December?
Yes, I think so.

Bond funds seem to go up and down by at least half-a-percent all the time, but a 1% drop in a week is not that usual. I would have preferred to buy today, but I didn't. And next week, I may even write that I would have preferred to stay in cash because there is no telling how much further down bond funds will go.
__________________
LOL! is offline   Reply With Quote
Old 11-05-2015, 12:55 PM   #778
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 16,535
We have different styles of short-term trading. With BND, you have to trade $100K in order to expect to make $1K short-term. I like to follow more volatile sectors which may move 3% in the same short period, then use 3x or 2x leveraged ETFs. This way, I hope to make $1K while plunking down only $10K.

On top of that, I often use covered calls, so that I get up to $500 up front with the call premium, then get the rest when the call gets exercised. If the sector turns around and the call expires worthless, the premium helps reduce my loss. Then, I wait for the right time to write more calls to get some gains or at least reduce my loss.

When I time it right, the trade feels really good, and I make 10% in less than 1 month. The leveraged ETFs are not meant for long-term holding, but occasionally I had to sit on them for a few months before I make money.

I reserve a couple of percent of my stash to plays like this, so the gains add up to a fraction of 1% of portfolio each year, but it is fun. I get to test my market call without risking my long-term holdings.
__________________
"Old age is the most unexpected of all things that can happen to a man" -- Leo Tolstoy
NW-Bound is offline   Reply With Quote
Old 11-05-2015, 02:09 PM   #779
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Jun 2005
Posts: 7,759
I am not short-term trading BND. It is part of my long-term asset allocation.

Can't one do a little market timing when purchasing long-term holdings?

Also, I do not hold cash if I can help it. I simply change my asset allocation at certain times identified in this thread. When I change my asset allocation, I will exchange from a bond fund to an equity fund or vice versa.

With equities up and bonds down, I am starting to get a little overweighted to equities. I may have to do something about that. And I do not mind moving a 6-figure amount from one holding to another.
__________________
LOL! is offline   Reply With Quote
Old 11-05-2015, 02:43 PM   #780
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,241
Quote:
Originally Posted by Fermion View Post
Utrecht, any trades lately or has the VRBO thing gotten you off track? This is earnings week and this thread is unusually quiet.
Ive kind of been like a deer in headlights the last 6 wks. It doesnt make sense to me that the market keeps going straight up. It should correct somewhat but I keep being proven wrong so Ive been very quiet lately. Ive made very few trades.

I decided not to fight the trend and held my nose and sold some weekly SPY puts the last 2 wks that expired worthless leaving me with nice profits.

Im currently short some weekly SPY 207.50 puts that will most likely expire worthless tomorrow. Im short a good amount of AAPL Nov95 puts that I sold about 2 months ago that are almost a sure thing at this point.

I have a bearish SPY trade on. Its a Nov 1X2 205/201 put spread. Basically its a 205/201 put spread with an added short position of an equal number of 201 puts. If SPY drops to 201 at Nov expiration I will make a sweet profit. If it drops below 201, I will let them put the stock to me with a cost basis of 196.95 and I will write calls against the stock. If SPY keeps going up, everything expires worthless and I keep $0.05 per contract.

I made a big mistake 6 weeks or so ago by selling a rather large portion of my long term SPY holdings at 192.90. I looked like a genius for about a week when the market kept dropping, but now feel like a clown for adjusting my long term holdings to short term market movements. I was trying to protect myself from what looked like a prolonged drop in the market, but it was a dumb mistake to adjust my long term AA when I was comfortable where I was at.
__________________

__________________
utrecht is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Market Timing Strategy Earl E Retyre FIRE and Money 141 10-28-2011 03:09 PM
Money Market funds in potential danger. clifp FIRE and Money 22 07-06-2011 07:10 AM
When it comes to photos, timing makes the shot REWahoo Other topics 0 07-01-2011 02:19 PM

 

 
All times are GMT -6. The time now is 11:51 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2016, vBulletin Solutions, Inc.