Ok, since Peter76 brought it up in another thread, and sense I know I'm not totally alone, I'll come out of the closet on this.
Like Peter76, I write uncovered (and covered) options on stocks from time to time (ok all the time
). I've had some success and some failures. I did this some in 2002 at a profit, but I'm not sure how much. In 2003, my profit was a little over $98,000. Then in 2004, I had a $3000 net loss. Why, I made some mistakes, broke my rules, got greedy and went on vacation with large open positions right as the market tanked in July! For 2005, I'm up about $12,000.
Peter76 wrote:
Let me know if you come across any good dividend/option plays Beachbumz. My current plays are
WIRE (price: 11.30, cost with option premiums is 10.20, August 12 1/2 call currently written)
HDI (sold the November 42 1/2 put the day it was hammered down to 47 1/2), PKZ (OUCH....sold total of 6 August puts, average strike price of 37 1/2 with 4.80 in premiums...currently down at 26!!!)
ENDP (July 17 1/2 put for 1.15, stock is at 20.43)
UTSI (sold Jan 2006 12 1/2 put for 1.7, back when the stock was at 17 1/2. Now it's at 7 and some change....double ouch!)
I like your approach Peter, it is very different from mine. What is your net performance so far? I mostly write puts on stocks with above average volatility and go 30% or more oom. I will get closer to the money with better stocks, such as HDI, which I just wrote an August 40 on for a whopping .55 premium. With these trades, I'm trying to make an annualized return of 30% or more. I had to put up about $5000 collateral on 10 contracts and received $535.00 for about 3 months.
I do something similar with some IRA money, only I get much closer to the money since there is no leverage. So, I only do it on stocks that I don't mind owning for a while. WGO, IGT and IRF are some recent trades. I had to purchase both WGO and IGT. I've written a few calls on both, but IGT has been in the crapper big time. I bought it at 35 and it's at 28.50 now. WGO has recently rebounded nicely.
Some recent put writes in taxable account (Not quite as exciting as yours):
HDI Aug 40 .55
IRF Sep 35 .95
NFI Sep 25 .75
SPW Sep 35 .80
URBN Sep 35 .50
A friend of mine likes buying calls and he's been pretty accurate. He goes in the money deep enough to get a delta of around .90 and buys calls on stocks that have just seen some good news. I have piggy-backed him some and done a couple of my own. Some recent examples were DE, QCOM, and ADP. I had the HD and ADP, but also IGT and NFI. IGT did good, NFI kicked my butt! He just tries to make $500 on a trade, with an average investment of about $4000 and hold time of a week or two.
Beachbumz 8)
Like Peter76, I write uncovered (and covered) options on stocks from time to time (ok all the time
). I've had some success and some failures. I did this some in 2002 at a profit, but I'm not sure how much. In 2003, my profit was a little over $98,000. Then in 2004, I had a $3000 net loss. Why, I made some mistakes, broke my rules, got greedy and went on vacation with large open positions right as the market tanked in July! For 2005, I'm up about $12,000.Peter76 wrote:
Let me know if you come across any good dividend/option plays Beachbumz. My current plays are
WIRE (price: 11.30, cost with option premiums is 10.20, August 12 1/2 call currently written)
HDI (sold the November 42 1/2 put the day it was hammered down to 47 1/2), PKZ (OUCH....sold total of 6 August puts, average strike price of 37 1/2 with 4.80 in premiums...currently down at 26!!!)
ENDP (July 17 1/2 put for 1.15, stock is at 20.43)
UTSI (sold Jan 2006 12 1/2 put for 1.7, back when the stock was at 17 1/2. Now it's at 7 and some change....double ouch!)
I like your approach Peter, it is very different from mine. What is your net performance so far? I mostly write puts on stocks with above average volatility and go 30% or more oom. I will get closer to the money with better stocks, such as HDI, which I just wrote an August 40 on for a whopping .55 premium. With these trades, I'm trying to make an annualized return of 30% or more. I had to put up about $5000 collateral on 10 contracts and received $535.00 for about 3 months.
I do something similar with some IRA money, only I get much closer to the money since there is no leverage. So, I only do it on stocks that I don't mind owning for a while. WGO, IGT and IRF are some recent trades. I had to purchase both WGO and IGT. I've written a few calls on both, but IGT has been in the crapper big time. I bought it at 35 and it's at 28.50 now. WGO has recently rebounded nicely.
Some recent put writes in taxable account (Not quite as exciting as yours):
HDI Aug 40 .55
IRF Sep 35 .95
NFI Sep 25 .75
SPW Sep 35 .80
URBN Sep 35 .50
A friend of mine likes buying calls and he's been pretty accurate. He goes in the money deep enough to get a delta of around .90 and buys calls on stocks that have just seen some good news. I have piggy-backed him some and done a couple of my own. Some recent examples were DE, QCOM, and ADP. I had the HD and ADP, but also IGT and NFI. IGT did good, NFI kicked my butt! He just tries to make $500 on a trade, with an average investment of about $4000 and hold time of a week or two.
Beachbumz 8)
