If you are on the blog page in a web browser from a computer, please subscribe to this using the "Follow by Email" link to the left. If you're on a mobile device you should see something in the frame that allows you to subscribe. Having your email helps me to notify you when Google mucks up email distribution.
~~~~~~~
Online Meeting Saturday, 5/12, 11 a.m. ET
Here is the dial-in and webinar info:
https://global.gotomeeting.com/join/753850757
You can also dial in using your phone: United States: +1 (267) 507-0007
Access Code: 753-850-757
First GoToMeeting? Let's do a quick system check: https://link.gotomeeting.com/system-check
Attendance is limited to the first 25 callers. I'm not increasing the number of seats unless the poll here indicates more than 25 are going to attend, as it costs me money with Citrix.
Here's what I'm covering unless I hear from you:
1) Introduction
2) Quick overview on what is a Cash Secured Put (for beginners!)
3) Quick overview on what is a Covered Call (for beginners!)
4) How to calculate Return on Option (ROO) and Annualized Return on Option (AROO)
5) Basic sequence in rotating through Cash Secured Puts / Covered Calls
6) Stock Selection for CSP/CC strategy <===== most important!
7) Don't Ignore Option Delta and Why
8) How to Determine the "Correct" Duration to Expiration and Strike Price to Sell the CSP.
9) Position Size -- How Not to Explode Your Account
10) Executing the Trade
11) Buying the CSP back -- or Not
12) Being Assigned Isn't So Bad
13) Selling the Covered Call -- Back to Duration to Expiration and Strike Price Selection
14) Buying the CC back -- or Not
15) Goodbye CC!
16) Rinse, Repeat
17) Repairing a Position where the Stock that has Dropped In Price
19) Just Cut Your Losses -- or Not
20) What is *REALLY* possible in terms of Annual Return for THE PORTFOLIO?
21) Open Discussion
I will do what I can to record the session and make the link available. PLEASE attend in real time if you can though -- it makes for a better experience for all.
~~~~~~~
CSPs I'm Watching for 5/10 Sell
First, definitions:
MinPrem: The amount I must collect from an option trade in order to meet an annualized goal, adjusted by my current win rate.
PCredit: The midpoint of the ask/bid for the stated option, reduced down to the next lower trading increment (if the increment is available).
Premium: Expected premium that I will receive on the trade if the PCredit value is accepted by the market.
CashReq: The amount I must have in the account to place the trade. These are CSPs in a retirement account.
#: This is the number of contracts to sell.
ToTPrem: The amount of total premium that I expect to receive, adjusted for either (1) a buy-back point at some designated level of profit (80%, 90%, etc.) or (2) a buy-back point at $0.05. Right now these reflect a $0.05/contract buyback.
ROO: Return on Option. The amount obtained by dividing the premium by the cost of the position. For a cash secured put, this is (Premium Received / (Strike Price * 100 - Premium Received) )
AROO: Annualized Return on Option. Take the ROO * 365 days/year divided by days to OE.
BE: Breakeven. This is the new break-even value for the underlying, and is the strike price minus the premium received.
Disc: The amount of discount the BE represents relative to the last good quote.
ProbAbv: The probability that the option will close above the strike price.
D...: Days to Expiration
IVRank: Implied Volatility Rank. A number from 0 to 100 that shows the percentile that the stock is moving over the past 21 days relative to the last 250 (or so) trading days. Higher IVR means more collected premium, lower means less.
SPutBid: The current bid price for the option.
SPutAsk: The current ask price for the option
SPut: The contract being reviewed
Strike: Duh
S...: An internal scoring mechanism that I use to rank potential candidates. The numbers mean something to me and not you, so don't worry about them
NPEarnings: Last reported earnings by the company.
OE: Options Expiration. The day the option expires. Days to OE is the date of expiration minus today's date.
May 18 OE:
June 15 OE:
June 1 OE:
June 8 OE:
June 22 OE:
~~~~~~~~
I hate holding across earnings release and generally oscillate all day on whether I should buy a put. I did not for ROKU, and it did not disappoint yesterday. I should close ITM for both calls with OE tomorrow and do very well.
Here are my present holdings going into the open today:
There have been no changes to my stock equity curve from the last report, but the option equity curve continues on the same upward path:
Option transactions (net $3,560), 112 total transactions, 93% win rate:
Account value before the open is $83,899.16.
The drop at the beginning of the curve is due to panic and not following my trading plan (VMW, OLED, WYNN). Stupid me and I'll NEVER make those mistakes again. You can see that the losses exceeded over $2,000 and with an average trade profit of $50.30 (as of today), it has taken me quite some time to claw my way back.
Money management says no single entry should be larger than $5,992 and no position/risk should be larger than ~$12K.
~~~~~~~
As with all my ramblings, you are responsible for your own investment decisions and I am not. Please do your own diligence, and please take ownership for your actions.
I look forward to your participation this Saturday.
The good, the bad, the ugly: this is automated and real time so there is no hiding: Get Notified of My Actual Trades in Real Time: https://twitter.com/grems8544
Regards,
pgd
Posts
No comments:
Post a Comment