Master Income Update -
Friday, 31 December 2010
Good morning!
Well the last trading day of the year falls on a Friday, a Friday
that has weekly options that expire…and a Friday where there’s
some weird action because of it being the last day to trade of the
calendar year.
I don’t know what to make of the action so far…and I don’t think
it’s required to run around and try to figure it all out. There’s
just a lot of forces out there selling stocks for taxable reasons,
and there’s also that Elvis has left the building feeling of it
being a long holiday week where lots of players, etc are simply
gone or checked out.
Needless to say, I’m excited to get back into the normal swing of
things…that normal, weekly feel of things.
Here’s what I’m doing on our MIT positions.
On BIDU, I am selling new, next week calls with the following break
down: approx 70% of the calls are Jan Week 1 100 calls, and approx
30% are Jan Week 1 95 calls. BIDU trades today in the $97 area, and
it’s anyone’s guess whether BIDU trades out of it’s funk – or just
stays mired where it is.
I’d love to see the weekly call premiums pick up in price – but we’ll
see. I’m 100%, 1 for 1 protected on the downside with puts (now the
protective put strike prices are right where the stock price is now).
On NFLX, I’m selling new, next week 185 calls and I’m just figuring
that today’s expiring 185 calls will expire worthless. So on this
position, I’m over-written, but just for today.
I’ve been a put seller on MSFT this week, and I’m deciding on having
some of these put MSFT shares to me. Once they are, I’m planning on
selling weekly calls. The big money that’s been hitting MSFT options
shows some gradual upside in the stock over the next 3-6 months.
This is a great backdrop to be selling weekly calls (and I’ll still
continue to sell weekly puts on it too). MSFT carries that 3%+ dividend
yield now to boot.
Yesterday, I sold new calls on AMZN for next week – so I’ll be seeing
this week’s 185 calls expire worthless.
Okay – that’s all I’ve got on the MIT side. I hope you have a very
happy and safe New Year!!
See you in 2011!! (I guess we now call the years from now on”twenty”
something instead of “two-thousand” something…hey…that simple
and short way of saying things works for me!!)
–P
Master Income Update -
Thursday, 30 December 2010
Good morning,
It’s always a light volume week, but on Tuesday the light volume
set a record dating all the way back to 1998. There hasn’t been
much going on this week.
Yesterday the commodity complex heated up with upgrades on Monsanto
and also some guidance by the Mosiac CEO foreseeing brisk pricing
for crops, etc.
Potash (POT) is the name right now that has weekly options in this
space. So I’d imagine the option premiums heating back up on that
name.
(it used to be I felt tired just looking at options on POT because
they were so busy and volatile…but POT’s really been in the freezer
lately with very normal, if not stale option pricing…perhaps this
new news and realities will thaw this name out a bit?! I hope so!)
Anyway – with the new options out today (for next week), I am doing
a few things with them this morning…mostly everything’s on the put
side of things (that’s short puts that I’m selling for income in
addition to the MIT trade).
For example, this week I was short the Netflix 185 puts, the stock
moved a bunch this week, but as it sits right here, NFLX is right around
$180 per share. I’m buying back these $185′s (for right near what I
sold them for), and selling next week’s $180 puts.
Next week’s at the money puts (180′s) on NFLX are $4.50!!! (that’s
equivalent to $18 for a 1 month, at the money put!!!??)
I’m doing the same thing on AMZN (a put roll), but I’m buying back
this week’s 185 puts and selling next week’s 185 puts.
On FAS, I’m doing a roll this morning, buying back this week’s 27
calls and selling next week’s 28 calls.
I’ll be doing more things tomorrow on our main MIT positions, so stay
tuned for the last update of the year tomorrow!!
Over and out for now, –P
Master Income Update -
Thursday, 23 December 2010
Good morning!
Options expire today – so today’s the day to adjust, re-position and
mix it up with that kind of fun!
Let me tell you some of the stuff I’m doing.
First of all, BIDU is showing super strong pinning effects today,
right there at the $100 strike. We’re doing some fun stuff with some
spreads, etc that expire today that take advantage of the “stuckness”
of the stock here at $100 today.
But these effects also help us when rolling out to next week too.
What I’m doing on our short (sold) call position here is basically
selling next week’s $100 BIDU calls. And because of the pinning,
I’m keeping this week’s 100 calls with the expectation that they
keep losing value throughout the day (as the forces want to keep it
pinned right there at $100).
Over on NFLX, I am selling next week’s 185 calls, and watching to see
that this week’s 185 calls expire worthless. NFLX trades for $182.70
about right now.
On AMZN, I’m deciding to buy back this week’s 180 calls and sell
next week’s 185 calls. I like the breakout AMZN has just done and
so I’m adjusting this roll to take advantage (make more money) with
how the stock’s behaving right now.
On FAS, I am rolling out of the 26 calls and selling next week’s 27
calls. FAS has been hot and it likely cools a bit. FAS trades for
right around $27.50.
I’ll keep saying it (and it might not be the most exciting income
trading possibility of all time), but MSFT is having the right kind
of news lately, and major/massive money is flowing into MSFT calls
out there in several months.
I’m doing put credit spreads on MSFT, but the stock pays a nice
dividend yield and is super solid as far as risk is concerned, it
of course also has weekly options on it!
I hope you have an awesome Christmas!!! See you back here on Monday.
–P
Master Income Update -
Wednesday, 22 December 2010
Hello there,
In being spoiled with weekly options (that’s a good thing!) – there
are still plenty of set-ups that command your attention as time goes
by and the market is busy being the market.
One such ticker with an awesome set-up is Tata Motors (TTM). They
plan on hiring an additional 50,000 workers in 2011. They are based
in India and they manufacture cars. (they now own the Jaguar brand
too).
Anyway – recently, it pulled back to it’s 50 day moving average, and
it just bounced off it like the line was a trampoline.
But also, WBC (auto parts/supplier company) just jumped out of the gym
yesterday due to a positive, surprise pre-announcement.
TTM only has monthly options, but the premiums are decent and the
set-up with this stock is superb. Right here, TTM trades for $30.60
approximately…and the options have $1 incremented strike prices.
There’s a lot to like about TTM for an MIT trade.
Tomorrow will be an interesting day in that the new weekly options
come out, but also Thursday will be expiration day for this week.
I’m going to be doing all the trades I can possibly to tomorrow morning,
before the long weekend gets priced in…so stay tuned!
–P
Master Income Update -
Monday, 20 December 2010
Good morning,
Finally, it’s nice to see some life and money come back into some of
the leading tech names out there.
Speaking of a leading tech name…something’s up at AMZN (no pun
intended) – today it’s seeing some very compelling action, which is
pushing it to a new 52-week high.
This one’s sure been a dream to make money from. And again, on the
side, I keep putting $$ in my pocket every single week in the hope
that I can have more AMZN shares put my way. But everytime the
stock rises (and doesn’t allow this to happen), I put every single
dime of that premium in my pocket, only to turn around the very next
week and DO IT AGAIN.
Is this legal? (that sound you hear of someone skipping down the
sidewalk and humming something is me!)
This morning’s action was about as stuck-in-the-mud as you can get.
For a while there I figured the whole week was going to be like that
as the first day of the week can sometimes set a tone. (due to the
shortened holiday week, etc)
But it now looks like money is feeling comfortable again to find a
home in the laps of the bigger, leading names (GOOG, PCLN, AAPL, even some
BIDU today) – and I’m liking what I see.
Anyway – I’m mostly observing today and not doing any new trades.
Over and out for now.
–P
Master Income Update -
Friday, 17 December 2010
Hello,
Now since I’ve decided to have NFLX shares put to me, this will be
a position I’ll be keeping track of here on the MIT updates.
Today I’m selling next week’s 185 calls on NFLX (you gotta like the
surge this stock had today). I’m letting today’s 200 and 195 calls
expire worthless.
On the downside protection on NFLX, I have both March 165 and March
170 puts for the time being.
On the side of this position, I’ve got a credit spread into next
week (on the put side, which is bullish to neutral, and the reason
I’m doing it is because NFLX has been hit so hard as of late, you
figure it’s due for a bounce). This put credit spread is the next
week 185/175.
On AMZN, and BIDU, I sold next week’s calls yesterday (I believe I
mentioned it…but I’ve been doing so much dang trading I can’t
remember!!)
Today’s FAS 26 calls look like they will expire worthless and next
week’s 26′s have already sold.
Also – there’s been big institutional money that’s steadily been
flowing into the likes of MSFT and other software companies.
specifically in their call options, in many strikes and in many
months, 3-6 months down the road.
With it’s dividend, MSFT is a solid, solid stock to be cashflowing
by selling weekly calls. Another way to do this is to sell weekly
at the money puts too.
I am doing this on the short-put side, fyi.
Hope this finds you well!
–P
Master Income Update -
Thursday, 16 December 2010
Good morning!
Let me fill you in on some of things I’m doing this morning.
First of all BIDU’s drop has been swift, stunning and crazy. Good,
good thing for having puts, and also having ratcheted up those
put strike prices as time goes on.
As it sits here this morning: BIDU trades at $98 and change.
I own both March 100 and March 95 puts on a one to one basis fully
protecting all BIDU shares.
As weekly options went away, I sold Dec 110 calls for next to $4
bucks. Of course, these are trading now for $.02 cents or so.
And what I’m doing this morning is selling next week’s (next week
expires on the Thursday, Friday is a market holiday, Dec 24th) 100
calls on BIDU. These are going for around $2.
See that? A one month premium went for close to $4. Here is a
weekly premium (on a shortened week no less!) and 4, $2 premiums
add up to $8.
$8!!!
Why am I selling these 100′s? Because here we have a day where
stock are bouncing back a little and feeling frisky – and BIDU is
just not having it. To boot, it got damaged pretty bad slicing
through its 50 day moving average yesterday on crazy volume.
But we can still make money here – and we can sleep like a baby at
night knowing the puts are right there, having rode in to the rescue.
AMZN is another stock acting great, even during the Nasdaq’s selloff
as of late.
I have sold Dec 175 calls on AMZN. AMZN now trades around $178.
I will likley roll out of this one tomorrow, and probably go up to
the 180 calls. AMZN is just shy of busting out again.
Over on FAS, I am selling next week’s 26 calls (doing an overwrite
for the time being, as I’m already short tomorrow’s 26′s). These
still have a bunch of time value for being 1 day left. So I’ll
close out of these Dec’s tomorrow.
Whew – that’s a lot. I’ll be back with some more stuff manana.
–P
Master Income Update -
Wednesday, 15 December 2010
Good morning,
The past few days have been pretty uneventful.
There’s still no sign of weekly options for BIDU (the changes actually
come out this evening, so it’s not 100% until they release the updated
list tonight). Anyway – BIDU is a leading beast that’s weathered a
bunch of Chinese names selling off recently.
It’s winding through a lot of sideways action recently, my gut says
this thing wakes up and when it does, it can really run.
But there it is, my biggest position, with weekly options yanked away
from it!!
I’m going to slim the size of the trade down, but am waiting until
the new year for tax purposes (something I rarely ever trade around!)
Anyway – some of the big, leader tech names are up some this morning.
I am taking the liberty over on AMZN to roll my April 150 puts up to
the April 160 puts. The stock trades today at $177 and I like keeping
the puts trailing behind the stock, but to not let them get too far
away.
There’s no gammas, thetas, or any other greeks. It’s simply a leading,
kick-ass stock that has compelling weekly premiums, and there’s only
a couple strikes to choose from to boot!!
Anyway – I’m doing this here and also looking forward to tomorrow’s
new weeklies to get next week kicked off right!
Talk to you then, –P
Master Income Update -
Friday, 10 December 2010
Hello there,
There’s several things I’m doing today that are MIT related…
I am rolling out of AMZN, buying back today’s 175 puts and selling
next week’s 175 puts.
I am also beginning a trade on NFLX, buying the stock (it’s around
$194), I’m selling next week’s $200 calls & I’m buying March 165 puts.
I’ve been selling weekly puts for a while now, and I’ve decided to
turn some of these into stock so I can sell calls, etc and see where
it goes (I will continue to sell weekly puts on it for income too).
By the way, you probably saw it, but NFLX got added into the S&P 500
index. It was announced anyway (and that’s the most important part)
I don’t think it gets officially added for a few more days I think.
BIDU heads into it’s last week finally. I don’t know what’s in store
for this big, huge name -and the fact weekly options were yanked
away from it?
FAS continues on it’s tear higher too.
Anyway – lots of solid stuff happening for us out there – and over
on the more actively traded weekly stuff, it’s simply off the hook
cool AND busy.
But I love it (I’m talking about all the cool stuff with expiration
day forces, the pinning effect, the rolling of spreads from one week
to the next, etc)
I hope all this finds you well. –Preston
Master Income Update-
Thursday, 9 December 2010
Good morning!
This morning I’m rolling out of my FAS 24 calls and selling next
week’s (the real December) 26 calls. There is nice premium on this
name week in and week out!
I’m going to wait on AMZN as it’s hugging around the $175 strike
price.
I’m also looking forward to BIDU swerving into the last week and
finally realizing the full premium potential of the 110 calls!
(Man, how did we do it before with monthly only options!?)
Also, I noticed another name up on the weekly board. Ticker: TBT
This is an ETF that is short the Treasury market…meaning as rates
inevitably rise, TBT will go up in value.
You can see this action in its chart. Take a look at a 1-year
chart on TBT. The action of where it’s been and where it’s heading
in a grander set-up is compelling as hell!
There is big money to be made on the selling of weekly premiums,
by either owning TBT and selling weekly calls and/or selling
weekly put premiums that are at to slightly in the money.
I did that latter this morning – but a very similar trade is being
long the stock and selling the weekly calls.
If you didn’t see it yet – I’m super excited to announce the date
of our first live seminar event for 2011. We’ll going to be
rolling on in to St. Augustine, FL.
Jan 27-28 (that’s a Thursday and Friday…two full trading days
together!).
You can check out all the details (which are very cool I might
add!) by going to:
www.unemployedtour.com
This event will be the first of 4 for 2011 of what we’re calling
the “Overpaid and Unemployed Tour”!!
I hope you check it out soon, before all that holiday stuff and
haze gets in the way!!
I’ll have so much new stuff that I’ve never shared before – I’m
literally exploding and jumping up and down in excitement!!
Over and out for now…
–P
Next Page »
