May was another good month for my account as stocks climbed and bond yields rose. My biggest opportunity for gains is in TLT still. With 500 shares short and additional naked calls in play, I have more upside potential from TLT’s decline than from another other position. I’m gaining on my equity naked puts too, but not as much and with a much lower cap on potential gains. My account performance remains much better than all indexes outside of the NASDAQ for the year-to-date and for the past 12 months. My account ended May with a Net Asset Value (NAV) of $99,621.81 according to Interactive Brokers (IB) after ending April with a balance of $95,384.17. I had a paper gain of $4,237.64 (+4.44%) on … [Read More...]

My TLT option combination for June that reaches expiration Friday in two and a half weeks seems safe from being assigned. My strikes on the June options are $145 for the covered puts and $180 on the naked calls. I have a paper profit of $249 on the June puts, minus the $230 or so in short interest and dividends I’ve paid. My naked calls have a paper profit of $1,688 so far. The purpose of the puts is to pay for my short interest and dividend payments while I wait for the share price to drop again. That’s working. The naked calls are both another way to bring in profit and, if the new options are assigned, raise my average price per share from … [Read More...]

Idiot governors, such as my state’s Governor Kemp (Georgia), might make my trades today poorly timed. By opening up the state from our lockdown while cases are still trending higher, we can expect a sharp increase in COVID-19 cases again. That’s the general consensus, but the hope is that my fellow Georgia citizens are smarter than our governor and won’t fill bowling alleys, gyms, churches, and salons too quickly. I recognize that being smarter than Kemp is a low bar to beat and that’s why I’m hopeful. My plan from the beginning was to sell puts to go with my short position if I was assigned my first round of TLT naked calls. I also planned to add more naked calls if … [Read More...]

January was a blah month by the end. It began with what appeared to be a missed opportunity for me, but I remained cautious and waited for a better entry point. The result was that my account barely moved and is in between the losses of the Dow and S&P 500, which is not much. I’m still wary of what might cause the market to move in either direction. The coronavirus is developing still and we don’t know how much of an economic impact it will have. I expect a few more rough days in the near-term and then maybe the market will reset after a solid consolidation phase. If we have a relatively calm week, I might start dipping my toe deeper into … [Read More...]

Those of you who have been reading my blog for a while know that I’m a fan of selling calls on TLT. The basis for my attraction to the bond ETF is that it’s volatile and tends to follow patterns. Most importantly, when it does reach new highs, it reverses away from these price spikes within weeks usually. Selling naked calls on any stock or ETF is risky, but I recognize these risks (especially since I’ve made mistakes with my approach in the past) and have learned to manage the trade better when I’m wrong on my timing. While TLT was trading at $143.09, I sold five TLT April $149 naked calls for $1.15 each and received $573.66 after paying $1.34 in commission. … [Read More...]

I came into 2020 with a light load of equity exposure and that low percentage of my invested cash is only going lower today. I had three option contracts expire today and sold one new one. Two of my option contracts were on IWM where I had a strangle using an IWM January $160 naked put and an IWM January $164 covered call. Technically, I guess that’s not an exact strangle since I was long 100 shares of IWM, but you get the point. My put expired worthless and my covered call will be assigned, forcing the sale of my 100 IWM shares more than $5 below where it’s trading this afternoon. I bought my IWM shares at $171 when I was assigned a naked put. Including that … [Read More...]

I made over $600 in five weeks. That’s always fun, especially when I don’t put up any money to back the trade. When these trades work out, it’s a thing of financial beauty to sell call options on shares you don’t own (aka “naked”). That means I had no capital set aside to back the order. If my naked calls were assigned I would’ve been forced to short the shares of the underlying ETF and my margin totals would’ve been adjusted accordingly, but until the options are assigned, the margin impact is extremely small and I don’t even bother adding it to my spreadsheet most of the time. While TLT was trading at $138.28, right at the open … [Read More...]

I’ve been slow to replace my AAPL naked put that expired a week ago. Part of that delay in action was due to my expectation of some weakness hitting stocks and the other part was just due to time constraints from work and life in general. I got caught up today, mostly, and finally got to take another look at my own trading account. Not only had I not replaced my AAPL April naked put, I saw that my MSFT May $115 naked put was trading under a dime after MSFT the earnings release that pushed the stock above $130 as of this morning. I wouldn’t be surprised to see MSFT “fill the gap” down to the highs reached before the earnings call, but … [Read More...]

April was a good month for me, not S&P 500 good, but good for my personal goals. Technically, I’m fully invested, however I’m sitting on a MSFT naked put that only has a few cents of time value left in it and I should put that money to work elsewhere. I don’t think I have any big distractions coming at me in May, so I should be able to get some more trades in to push me closer to where I should be on the risk side. My account ended April with a Net Asset Value (NAV) of $92,169.78 according to Interactive Brokers (IB) after ending March with a NAV of $90,005.66. I had a gain of $2,164.12 (~2.4%) on paper for April … [Read More...]

Since the December options expiration Friday two and a half weeks ago, I’ve made no trades. As I mentioned in my options summary post back then, I thought stocks were oversold and I opted to wait and let the bounce play out some without selling new covered calls on the stocks and ETFs I owned already. The decision not to sell covered calls since then was a good move (or non-move?), but with so much going on late in the year, I didn’t realize how much cash I was leaving on the sideline as it became clear the slide was over for now. This afternoon, I got back into the swing of things with a small trade. While XLB was trading at $52.16, … [Read More...]

My one XLB February $52 covered call was my only option I had that expired today and it’s $2.24 in the money as I write this mid-morning on Friday. I’m letting it expire in the money and my 100 shares of XLB will be called away. I’ll end up with a realized gain of $218.66, including the premiums I’ve received since the first $53 strike naked put I sold in October and the covered call that I sold in January. That’s a 4.39% gain on a trade I didn’t time that well. My 200 AAPL shares were a bad trade from the beginning when I sold an extra put by mistake (that was also assigned). Just after the open this morning, when … [Read More...]