Master Income Update -
Monday, 31 January 2011
Hello (or I guess ahoy!) -
We had such a killer time in Florida. It was jam-packed and really
cool. On Thursday (the 1st day) we watched Netflix explode higher
(and enjoyed the fact that calls weren’t written for the week!).
And to boot, we saw it move up another $7+ on Day 2! Then we watched
the market fall apart on Friday with the Egypt scare.
Also during the event, POT announced earnings, a pre-announcement, and
also slathered on a 3 for 1 stock split for good measure to be done
toward the end of Feb!
We jumped on this one doing a put credit spread calendar, basically
taking advantage of the weekly traded options, selling them week to
week then having a March protective put in place.
POT, by the way, is an EXCELLENT MIT candidate right now. Either get
some longer term calls, or stock…get some longer term protection
under it (maybe 1/2 protection…especially right here as the stock
approaches that 3 for 1 split date).
But your stock or calls will all triple and have the strike price
adjusted down by 1/3rd. This one should be nice and volatile and
all jumpy around for many moons. It’s a terrific, kick-ass stock!
I’m going long the stock today (with no puts under yet)- and what I’m
doing between now and the split time is either selling way out of the
money weekly calls…or some opportune calls come Thursday or Friday
where there may be some pinning or other forces on our side for some
premium capture.
I want to catch any of the upside running into the split time – and
then sell weekly premiums again and again and again on this one.
I love it.
I am deciding to sell 10 calls on NFLX at the this week 220 calls.
I already sold the 215′s for this week (last week) so now there’s
a full set of calls sold against the stock.
I am also rolling protective puts on NFLX. Rolling the March 170
puts up and out to the NFLX June 185 puts. Given the explosion in
the stock, I want to keep the protective puts going along with it and
not let the time decay eat into them, etc.
Also, I’m moving half of my AMZN protective puts down from the April
170 puts (where the stock is right now) to the April 155 puts). This
is sorta cashing these in for that move down, then re-establishes that
distance between stock and protection. I am also selling 10 calls
for this week’s 170′s on AMZN. Now I have a full 20 calls sold.
Okay – over and out for now! –P
Master Income Update -
Monday, 18 January 2011
Good morning!
First thing’s first – there will be a members only “open mic” webinar
this coming Wednesday, where I’ll try to get to as many questions
as possible – and also update you on the coolest stuff I’m doing, etc
with income trading.
So all you have to do is click on this link and you’ll see all the info
you need for Wednesday:
http://clicks.aweber.com/y/ct/?l=DzBmR&m=1f.SGgm5wTbj40&b=fk_PpVCp1tonuFO5.Pi0lA
It will begin at 11 am Eastern time (that’s 8:00 am Pacific, 9 am
Mountain and 10 am Central).
It will also be recorded and available in the member area after it’s
edited, posted to the web, etc.
I really look forward to these so I hope you can make it!
I’ve been shuffling some trades and ideas around due to the news out
of Apple with Steve Jobs stepping down again.
In a nutshell, Apple’s challenges and perceptions that it may not be
at 110% throttle without his genius at the helm, will likely be
increased market share (or perceived marketshare) for the likes of
GOOG and it’s droid, soon to be released tablets, etc.
GOOG is responding accordingly this morning! But it has earnings this
week as well (AAPL announces after the close today).
I see GOOG being a great MIT candidate because of this sudden news.
But of course, that’s a $640ish stock, which means you’d really have
to have portfolio margin kicked in in the account you’re trading so
it wouldn’t gobble up all the buying power in your account!, etc!
As soon you puts are purchased, and given you do an amount of shares
appropriate for your brokerage account – you can trade this one just
as if it were at $64 stock (again, by adjusting the share amount).
I’m doing a similar trade but with puts…specifically selling this
week’s 635 puts and buying the Feb 610 puts, for what’s termed a
calendar spread. It’s very similiar to buying stock, selling weekly
calls and having the put protection underneath the stock…but it
requires no stock.
Moving on…AMZN looks real good this week, and NFLX is right there
too.
I’m selling MSFT 29 calls against my 3,000 shares today. These are
like a dime, so this is almost not worth mentioning…but I do have
these shares of stock. MSFT is right at $28.50.
Okay – that’s it from me for the time being. I’ll see you tomorrow
and definitely on Wednesday this week.
–P
Master Income Update -
Friday, 14 January 2011
Hello,
Okay, here’s how the day is shaping up and what I’m doing…
Keep in mind that we have a 3 day weekend in front of us because
of MLK, Jr. Day on Monday (market holiday).
With JPM’s earnings and forecasts out this morning, it is goosing
the banks all the way around…and so I’m rolling out of my 30
calls that expire today and selling next week’s Jan 31 calls.
I am rolling out 100% of my BIDU calls that are at today’s 105′s &
selling next week’s 107′s. BIDU trades here just north of $107.
(BIDU has a TON of strike prices for the normal January expiration
cycle!!)
On AMZN I am rolling out of 100% of my 185 calls and selling next
week’s 190 calls.
MSFT is kind of crunky to sell next week’s premium on! Why? Because
gone goes the $28 option strike for that expiration…instead they
print 27.50 (calls and puts). The trouble is, with MSFT at $28.17,
the $29′s are too far away and the 27.50′s are too far in the money.
So it’s likely I won’t do any “incomin’” on this name for next week.
Okay – that’s what I’ve got on the current MIT trades. Hope you have
an awesome long weekend!
–P
Master Income Update -
Thursday, 13 January 2011
Good morning,
As we round the bend into the final week for ALL options – we’re
seeing continued strength in the big tech names out there.
Intel announces earnings today. Next Tuesday AAPL chimes in with
results (and a million-zillion commentaries from analysts about its
future, etc) — and…well…that’s what being in the thick of
earnings season is all about.
On my Netflix position, NFLX is pushing up to around $192. NFLX
looks like it’s just sitting there inside a base (going sideways),
and it’s normal and healthy for stocks to do this (pause) before
they can make some headway again.
Just look at PCLN recently, at that 2 month long sideways channel
it built before it meaningfully broke out (this means with big
volume behind the breakout).
Anyway – while I’m going to be rolling out of this week’s 185 calls
on NFLX, right now I’m adjusting half of my puts that are sitting
at the March 165 puts. I am moving these to the June 170 puts (this
is the only next available date for option expiration past March).
The remaining puts I have are March 170 puts…and I look to adjust
these in the next little while.
On the side…I had sold 180 puts on NFLX for this week, and all
that premium slides right into my pocket (with NFLX at $192+!).
So I’m selling next week’s 190 puts on NFLX and taking in another
$4 or so.
There will be a ton of stuff to do come tomorrow in lots of positions
I have like BIDU, AMZN, etc.
Anyway – I hope this one finds you well today! –P
Master Income Update -
Tuesday, 11 January 2011
Good morning,
If you haven’t heard about it yet, Verizon is announcing a big deal
today about Apple and Verizon now being buddies (and I believe there’s
a new joint iphone together?)
They’re making a big splash about this announcement taking place on
1-11-11, and it’s going to be at like 11:11 or something silly like
that!!
I mention this because the big tech names are really acting strong,
especially given yesterday’s rally/bounce after a weak start to the
week.
BIDU is strong too at $107.
BIDU is still my biggest position and the premiums out into January
(the Friday after next) are compelling. On the side, I’m selling a
put credit spread at the 107/97 strikes (selling 107′s, buying 97′s).
It brings in income and if I’m put more stock, I own it at a discount.
I anticipate doing this that I make extra money and don’t get more
stock put to me though!
A thing to keep in mind is we don’t have to wait until the new
weekly options become available on Thursday of this week. The reason
being…they’re already out! And the reason is, next week’s options
are the normal January options.
So we can kind of cheat and become sellers or rollers into those
options at any point this week.
So this is one thing I have in the back of my mind this week. It’s an
extra edge – and I’ll point this out on trades that I adjust and roll
this week.
Stay tuned this week. –P
Master Income Update-
Thursday, 6 January 2010
Greetings!
The new weeklies are out as you already know – and here’s a list of things I’m doing today.
I’m overwriting (selling) next week 185 calls on NFLX, while anticipating and still holding (short) tomorrow’s 185 calls.
I’m rolling out of 100% of my FAS 28 calls (that expire tomorrow) and selling next week’s FAS 30 calls.
I am rolling out of approx 25% of my BIDU (this week) 95 calls and selling next week’s 105 calls.
I am rolling the other 75% of my BIDU calls from this week’s 100 calls and selling next week’s 105′s. That makes 100% of my sold calls for next week at the $105 strike.
I think Patriot Coal (PCX) is hot and bothered, but they don’t have weekly premiums…I’m doing a put credit spread, but an extremely similar position is to do an MIT…buy shares, sell at, to slightly out of the money calls…then have downside protection several months out on the puts.
On MSFT, I am buying back this week’s 28 calls and selling next week’s 29 calls. MSFT is on the move…and it takes a LOT to move this beast…that means lots and lots of institutional money coming in here.
Okay! I’ll see you here tomorrow! –P
Master Income Update -
Tuesday, 4 January 2011
Hello there,
As you may know, BIDU’s been my biggest position for most of 2010.
When they took weekly options away from this beast, I figured I’d stay
with BIDU until we got into 2011, and then start whittling down the
position.
But about 5 weeks after they were taken away, they came back! Only
to see BIDU really fall out of bed.
Needless to say, there’s been a healthy level of drama in this name
(but wait a minute…doesn’t a lot of drama equal a good income trade!?)
With BIDU trading here right at $100, I’ve got 2 different put positions.
Against my 7,000 shares, I have 20 puts at the March 100 puts. And
I own 50 puts at the March 95 puts.
The adjustment I’m making today is moving (selling) these 20 March
100 puts and moving (buying) 20 of the June 90 puts.
I try to adjust my protective puts out there as they get inside (or
close to inside) of 2 months from expiration. And since these puts
are at the money, I don’t want to sit by and watch all of this time
value erode to nothing.
By adjusting these puts out to June, it accomplishes a couple things:
First of all, the time decay problem gets checked and muted, and
Second, the idea of the put protection is to be there for an emergency,
save your hide reason (also to kick in favorable margin, especially
with portfolio margin). When the stock goes down, I like to adjust
the put strike prices down too…especially after lots and lots of
income generation that’s happened throughout this trade.
Just wanted to let you know what I’m doing and why!
That’s the only thing I’m doing today on the MIT side.
Stay tuned for much more this week! –P
Master Income Update -
Monday, 3 January 2010
Good morning!
After last week’s snooze – it’s not surprising to see the market, and
by default, the market leaders stand up to attention and really attract
the buyers.
That’s what we’re seeing and all you have to do is look at AAPL, AMZN,
PCLN and a host of other leader types, all the across the board today.
And it’s great to see!
I had some MSFT shares put to me over the weekend, so I’m selling
this week’s 28 calls against the shares. And I’ll look to continue
the weekly put selling too.
(I’m not buying protective puts on this MSFT position, fyi).
It was for that drab, light trading week that I decided to sell calls
on AMZN, for example, at the 185 strike and not get sucked in or tempted
to sell call that were right near the money. I just figured last week
was last week, and that the real action would start hitting today.
That goes for selling most of my calls on BIDU at $100 (instead of
at $95) and also on NFLX, etc, etc.
Not only this…but there seems to be more life in option premiums
too…they were looking pretty thin across the board there for a while,
so it really feels like we’re back in the saddle with all the market
participants back and plugged in.
Hope you had a great New Year’s! –P
