Disliked{quote}i've not been able to follow ezone developments very much lately. Maybe just as well....if europe sneezes pretty hard I'm sure the US would catch a cold....Ignored
Fireworks are fun ... as long as you don't blow your fingers off.
- #221
- Sep 29, 2016 7:27pm Sep 29, 2016 7:27pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
Fireworks are fun ... as long as you don't blow your fingers off.
- #222
- Sep 29, 2016 7:37pm Sep 29, 2016 7:37pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
That's one little fella I'll have to look at during NY ... . I considered something low buying power intensive like a short put (the Nov 18th 7 put offers up .73 at the mid with a wide bid/ask) or a standard covered call, but with the call out in, for example, Jan to bring in a larger credit on the front end:
That would be a 25.4% ROC if called away at 8, but like the article says, it may require "some patience" ... .
That would be a 25.4% ROC if called away at 8, but like the article says, it may require "some patience" ... .
Fireworks are fun ... as long as you don't blow your fingers off.
- #223
- Sep 29, 2016 7:41pm Sep 29, 2016 7:41pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
The High IV list as of NY close:
There are some new names in there, but in the same old places: OAS (petro), OCN (financial), and ECA (petro). I feel like I should just man up and sell short puts in VRX ... .
There are some new names in there, but in the same old places: OAS (petro), OCN (financial), and ECA (petro). I feel like I should just man up and sell short puts in VRX ... .
Fireworks are fun ... as long as you don't blow your fingers off.
- #224
- Sep 29, 2016 7:51pm Sep 29, 2016 7:51pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
Fireworks are fun ... as long as you don't blow your fingers off.
- #225
- Sep 29, 2016 8:11pm Sep 29, 2016 8:11pm
- Joined Apr 2009 | Status: Live and learn. | 25,175 Posts
"If The Fool persists in his Folly he will become wise." - William Blake
- #226
- Sep 29, 2016 8:38pm Sep 29, 2016 8:38pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
{quote}LOL....just in time for the end of Shemitah....what could go wrong, anyway? ZIRP, NIRP, derp,....DB with $24 Trillion in derivitives risk exposure...nevertheless, I am long DB....
Fireworks are fun ... as long as you don't blow your fingers off.
- #227
- Sep 29, 2016 8:40pm Sep 29, 2016 8:40pm
- Joined Apr 2009 | Status: Live and learn. | 25,175 Posts
"If The Fool persists in his Folly he will become wise." - William Blake
- #228
- Sep 29, 2016 8:43pm Sep 29, 2016 8:43pm
- Joined Apr 2009 | Status: Live and learn. | 25,175 Posts
"If The Fool persists in his Folly he will become wise." - William Blake
- #229
- Sep 30, 2016 6:18pm Sep 30, 2016 6:18pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
Fireworks are fun ... as long as you don't blow your fingers off.
- #230
- Sep 30, 2016 6:27pm Sep 30, 2016 6:27pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
Fireworks are fun ... as long as you don't blow your fingers off.
- #231
- Sep 30, 2016 6:33pm Sep 30, 2016 6:33pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
Fireworks are fun ... as long as you don't blow your fingers off.
- #232
- Oct 1, 2016 8:54pm Oct 1, 2016 8:54pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
Working on some ideas for next week. Here's my shopping list for covered calls. These are after hours quotes, so naturally price may differ on open:
These are all "monied" covered calls (i.e., the short call strike is below the price of the stock).
Here are the scenarios in which you make profit from such a setup: (a) Price stays above your short call strike through expiration. In that event, the shares are called away at your short call strike and your profit equals the difference between what you paid for the setup and the short call strike (excluding fees/commissions). (b) Price breaks below your short call strike, but stays above your cost basis. In that event, the short call will expire worthless (for which you will book a profit). The share price will have declined, but your net profit will be the current value of the shares minus what you paid for the setup. (This is because the money you made on the short call will exceed the decline in price of the shares).
In the event price declines below my cost basis, I generally opt to continue to sell calls against, further reducing my cost basis in my shares until I can either exit the trade for a scratch or for a profit, as with any other covered call.
I generally do OTM covered calls (i.e., the short call strike on setup is out-of-the-money). I just feel this gives me a touch more flexibility working the setup for longer if I like and naturally produces a better ROC %-age metric if I have some confidence that price in the underlying will trundle upward and break my OTM short call. Going "monied" caps off potential profit right from the get-go if the underlying rips off to the moon (although you can naturally attempt to roll the short call up and out for additional credit if that happens), but I'll generally opt for monied if I think that there is a more than usual risk that the stock will decline for whatever reason and want to offer myself larger than usual downside protection. For instance, in this particular market environment, I could see the broader market giving up some of its gains here for whatever reason, sinking "the entire" ship, so to speak, such that all stock positions generally experience what the broader market is undergoing ... . For lack of a better way of describing it, I've have a "monied" vibe here ... .
These are all "monied" covered calls (i.e., the short call strike is below the price of the stock).
Here are the scenarios in which you make profit from such a setup: (a) Price stays above your short call strike through expiration. In that event, the shares are called away at your short call strike and your profit equals the difference between what you paid for the setup and the short call strike (excluding fees/commissions). (b) Price breaks below your short call strike, but stays above your cost basis. In that event, the short call will expire worthless (for which you will book a profit). The share price will have declined, but your net profit will be the current value of the shares minus what you paid for the setup. (This is because the money you made on the short call will exceed the decline in price of the shares).
In the event price declines below my cost basis, I generally opt to continue to sell calls against, further reducing my cost basis in my shares until I can either exit the trade for a scratch or for a profit, as with any other covered call.
I generally do OTM covered calls (i.e., the short call strike on setup is out-of-the-money). I just feel this gives me a touch more flexibility working the setup for longer if I like and naturally produces a better ROC %-age metric if I have some confidence that price in the underlying will trundle upward and break my OTM short call. Going "monied" caps off potential profit right from the get-go if the underlying rips off to the moon (although you can naturally attempt to roll the short call up and out for additional credit if that happens), but I'll generally opt for monied if I think that there is a more than usual risk that the stock will decline for whatever reason and want to offer myself larger than usual downside protection. For instance, in this particular market environment, I could see the broader market giving up some of its gains here for whatever reason, sinking "the entire" ship, so to speak, such that all stock positions generally experience what the broader market is undergoing ... . For lack of a better way of describing it, I've have a "monied" vibe here ... .
Fireworks are fun ... as long as you don't blow your fingers off.
- #233
- Oct 2, 2016 1:56pm Oct 2, 2016 1:56pm
- Joined Dec 2012 | Status: On Life's Path | 2,076 Posts
Working on some ideas for next week. Here's my shopping list for covered calls. These are after hours quotes, so naturally price may differ on open: {image} These are all "monied" covered calls (i.e., the short call strike is below the price of the stock). Here are the scenarios in which you make profit from such a setup: (a) Price stays above your short call strike through expiration. In that event, the shares are called away at your short call strike and your profit equals the difference between what you paid for the setup and the short call strike...
A good conservative strategy. I did quite a bit of this with dividend paying stocks. Usually went 6-9 months out with the short call.If you do quite a few short-term trades (1 month), you can cut your commissions in half by just selling 1 naked put rather than the covered call. To open a covered call requires 2 transactions (2 commissions) compared to selling 1 put (1 commission). The trade profit will be nearly the same (sometimes a bit more & sometimes a bit less). Also, if not a very liquid stock then you're dealing with 2 spreads(stock & option) to try to fill the order. Less "cluster" of positions in portfolio also.
Covered Call:
Buy 100 X shares @ 18.86
Sell 1 18 Call @ 2.22
Stock closes @ 18.50 @ expiration
Stock called away with a profit of 1.36 minus (commission x 2)
Naked Put:
Sell 1 18 Put @ 1.39
Stock closes @ 18.50 @ expiration
Put expires worthless with a profit of 1.39 minus (commission x 1)
***Both have the same risk & same reward potential.
***If there's quite a bit of difference in the call trade vs. the put trade, then there's probably a dividend payment before expiration.
***Calculate the commissions x (# trades/month) x 12 months = $$$$$$$ (Can make a difference in yearly performance.)
***If stock closes below 18 @ expiration, both trades will result in owning 100 shares of X. Put trade will not be charged a commission to have the stock "put" to you.
- #234
- Edited 10:00pm Oct 2, 2016 9:31pm | Edited 10:00pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
{quote}
Fees can end up taking a large bite out of your profits, particularly if you're working with a relatively small number of contracts/if you're in and out and in and out of trades repetitively/are not working the trade for any dividend or as a buy and hold, long-term cost basis reduction trade ... .
Fireworks are fun ... as long as you don't blow your fingers off.
- #235
- Oct 2, 2016 9:58pm Oct 2, 2016 9:58pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
Fireworks are fun ... as long as you don't blow your fingers off.
- #236
- Oct 2, 2016 10:18pm Oct 2, 2016 10:18pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
{quote}
Fireworks are fun ... as long as you don't blow your fingers off.
- #237
- Oct 2, 2016 10:36pm Oct 2, 2016 10:36pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
Fireworks are fun ... as long as you don't blow your fingers off.
- #238
- Edited 7:45am Oct 3, 2016 7:28am | Edited 7:45am
- Joined Dec 2012 | Status: On Life's Path | 2,076 Posts
- #239
- Oct 3, 2016 6:34pm Oct 3, 2016 6:34pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
Fireworks are fun ... as long as you don't blow your fingers off.
- #240
- Oct 3, 2016 6:37pm Oct 3, 2016 6:37pm
- Joined May 2014 | Status: My Ideas Are Just That -- Ideas | 4,473 Posts
Fireworks are fun ... as long as you don't blow your fingers off.