Master Income Update -
Monday, 28 Feb 2011
Greetings -
Apple and Google are strong today with AMZN and NFLX weakened
some (we have to keep this in context as NFLX is still very
healthy in its uptrend, but there’s been a lot of blowback
as of late).
The rumblings, I guess, is that GOOG (who owns YouTube) is
getting aggressive is getting streaming content of it’s own,
and of course this is a threat to NFLX and also AMZN as they
are poking their head in the business too.
I’m not changing anything in what I have. I happen to be in
both GOOG and AAPL with put credit spreads (no stock) at the
time being.
Seeing the agriculture stocks with white hot strength is
compelling enough to seriously consider adding to POT if you’re
in it. It has been a champ right through its 3 for 1 stock
split – you gotta love this action!
As I’ve said, I left the call selling alone through the split
just for this reason…that if it decided to cover a bunch of
ground (a $2 move post 3 for 1 split is the same math as POT
covering $6 bucks at the old, triple-digit price!) – that I’d
put it all in the bank.
Well with 2 up days post split now, I’m selling 30 this-week
$65 calls on my now 3,000 shares. This isn’t a boatload of
premium, but it is what it is for being so far out of the
money. As soon as we get more time under our belt, I’ll be
selling calls that are nearer the money.
I had some more MSFT put to me over the weekend, and I didn’t
have any calls sold on the name, so I’m selling calls (50)
on MSFT today, selling the this-week 27 calls.
I’ll be interested in how NFLX and AMZN continue to behave..
NFLX had that amazing reaction to their numbers just a few
weeks ago…and on a sidenote, I’m noticing how puffy and
expensive the weeklies are on a NFLX right now since there’s
more volatility being priced into options.
I’ll be letting you know what else I do as the week unfolds!
Over and out, –P
Master Income Update -
Friday, 25 February 2011
Hello,
Very nice to see stocks in general today battle back.
I have 20 contracts I’m rolling out of BIDU, out of today’s
120 calls and selling next week’s 125′s.
I’ve got 50 at the 120′s for next week and 20 at the 125′s.
The Priceline put spread trade (no stock) worked out like a
beast this week because of earnings…and that earnings
announcement was nice to see, I’m sure, as far as the market
getting a confidence dose that these companies are kicking
ass and taking names and growing like weeds all around the
world.
I also look forward to getting over to Monday as I’ve got
overwrites going on lots of our MIT positions this particular
week. The margin being released as they expire is always
nice.
Also, how ’bout that post split move in POT!? That’s the
exact reason I didn’t want to have short calls against the
stock through this date. A $3 move is a $9 move factoring
in a 3 for 1 split! Awesome, awesome.
Anyway – I’m going to wait ’til Monday to decide on the call
selling in this name.
Hope you have a great weekend. –P
Master Income Update -
Thursday, 24 February 2011
Hello again!
Today is a day of overwriting left and right. Due to the
sudden drops in the market this week, it’s left a lot of way
out of the money calls that I’m content to see expire worthless
come tomorrow.
Here’s some rundown of what I’m doing today in the MIT positions:
Overwriting (selling to open), RIMM 67.50 calls (letting this
week’s 70 calls expire worthless)
Overwriting on IBM, selling next week’s 160 calls and letting
this week’s 165′s expire worthless.
Doing same (overwriting) on AMZN, letting this week’s 190 calls
expire out, but selling next week’s 180 calls.
By the way, across the board out there, options pricing has
made a jump up. That’s because of increased volatilities getting
factored in.
I’m also overwriting on FAS, selling next week’s 31 calls (and
letting this week’s 34 calls expire worthless).
POT splits 3 for 1 and will reflect when we wake up tomorrow.
I don’t have calls sold on this name and didn’t plan to through
the split like this as anything can happen.
On another note, FAZ did a reverse 1 for 5 stock split, prob.
to hoist up the stock price so it’s able to offer more strike
prices, etc to the market. This is weird for an ETF to do, but
I’ve seen much stranger things in my time!
Oops, also on BIDU, I’m selling 50 next-week 120 calls. I have
50 of my 70 current short calls at the 125 and 130 strike
prices that expire tomorrow….FAT CHANCE! Which is why I’m
selling more today.
Hope this finds you well! –P
Master Income Update -
Wed, 23 Feb 2011
Good morning,
As we start into a second day of storms for the stock market,
these are the times where having puts on our stocks does all
the explaining (rather than trying to figure out what puts do
in all those thick option books!)
While it’s anyone’s guess, from one shift of the winds to the
next, what stocks will do…will they capitulate, are we in a
new reality, are the trends over, etc, etc, etc – I try to
avoid taking a bunch of drastic actions, thinking I know what
the market is going to do from one minute to the next.
Specifically, I’m talking about avoiding the temptation of
doing a blanket buy back of all those now way out of the money
calls, only to roll them to the same week, at the money calls.
In a market where it whip saws back to the upside, even a little
bit…this doesn’t help the cause!
That said – we have to be mindful that all this sudden volatility
goes right into the option pricing, making them puffy and pricey
all across the board.
This bodes well for us as weekly sellers of this premium.
I currently have 40 sold BIDU calls at the this-week 130 calls,
given these are waaaaay out of the money (and worth 2 cents or
so), and given that the BIDU 120 calls are waaaaay out of the
money (and given that I’m not doing this on all 70 calls that
I’ve sold) – I am rolling 20 of these down to these Feb 120
calls.
I’m planning on going through the 3 for 1 stock split in the
next few days on POT too. I had bought 5 puts (June 160 puts)
against my 1,000 shares. Today I’m buying 5 June 145 puts as
well.
The way I see it, because POT has weekly options, and because
the market and this stock are so freaking volatile – I want
to be a weekly seller of calls against the stock…and just
around the corner there will be triple the shares (and of
course a stock price adjusted 1/3 too).
Okay – over and out for now, –P
Master Income Update -
Tuesday, 22 Feb 2011
Good morning,
With the mideast in a roil, and with our market closed yesterday -
it’s clear where the built up sentiment wants to take stocks today.
Right after the open, it looked like some clearer heads were going
to prevail…but as I write this, stocks can’t buy a break…and
it’s across the board.
The fact that a video of Steve Jobs was captured as he left a coffee
shop looking wobbly and weak (and also rumors of a delay in the next
ipad) doesn’t help tech’s largest star.
It’s no surprise that we were going to get some market profit taking
one of these days/weeks. But today it looks like it all wants to
happen all at once.
This is the reason for those protective puts we have on our positions.
It’s the reason we think about those rainy days. While it’s not
raining outside today – it is on our screens.
On Thursday and Friday, I found myself with so much dang trading to
do, that it was my bad about not getting an MIT update out!
But after a while – the weekly actions start to become like Ground-
hog Day (the movie!). Which is to say, the same thing again and
again and again.
The variety comes in which strikes to choose -and also when to roll
(but even the when-to-roll question gets “same ‘ol” as it’s usually
when all but a teeny-tiny bit of time value remains in the options.)
(or else there’s an overwrite).
What I did on Thursday and Friday is roll out to the same strike
prices as I had. The leaders hadn’t acted exactly right when the
market had decent days last week.
But of course, no one could have predicted more mideast unease, an
earthquake in New Zealand – and this sudden pop in oil prices.
Last week I got into a put credit spread on RIMM, and truth be told,
could not physically get to the trade before the close of the trading
day.
Consequently I had 2,000 shares of RIMM put to me. Since they have
weeklies, I’m selling 20 this-week 70 calls against the stock and
also buying 20 May 62.50 puts for the rainy days.
I also found myself earlier today selling 10 BIDU calls cause I
apparently didn’t sell all 70 last week (I sold 60). So I sold 10
this-week Feb 125 calls.
I also had only sold 15 out of the 20 possible on NFLX, so this
morning I sold 5 of the this-week 230 calls.
Other than that – I’m taking today in stride. After all, you never
know…we could capitulate any minute here and then see one of those
late-day surges that covers a lot of ground?!
I’m not sure if I mentioned on here, but I had bought 20 April 130
puts on the SPY (the S&P 500 index) a week or so ago, only to see
the market keep surging.
But it was a protection “slack adjuster” kind of thing…then late
last week, I bought 10 more of the same.
While it’s not a hell of a lot, I just did it as the market kept
sailing along. On a day like today, these kick in a little bit
more and do their job!
Okay -that’s all for now. Over and out, –P
Master Income Update -
Monday, 14 Feb 2011
Happy Valentine’s Day -
(as if you have to be reminded of yet another “Hallmark invented”
holiday!!)
Anyway – the big beast and mover out there today is none other than
Netflix.
Wow – and what a mover!!
I get that the stock is breaking out…and I’ve traded and adjusted
the income components to allow for some run – but today’s pop because
of an out-of-the-blue upgrade is flat out stunning.
Amazing.
It has me doing a few things to try and keep up. On the protective
put side, I am moving 5 of my June 185 puts up to the June 220 puts.
I still have 20 puts for protection on the 2,000 shares, and here’s
how they break down after this adjustment:
5 at the June 185 puts
10 at the June 190 puts
5 at the June 220 puts
I always like adjusting puts on these up moves in the stock (adjust
them up when you think you don’t need ‘em).
I’m also rolling up 10 of my 20 calls from the Feb 230 calls to the
Feb 245 calls.
On BIDU – I’m rolling out of 10 of the BIDU Feb 120 calls, rolling them
to the Feb 130 calls.
Geeez, I expect to see NFLX have some profit taking on a day like
tomorrow – but you just don’t know with this b-e-a-s-t!!
(as an aside, I’ve got 40 short weekly puts going on NFLX that just
pours the Benjamins in the pocket on days/weeks like this…I have
to keep checking through the shutters to see if any black cars are
out there…or helicopters!)
Okay – over and out for now, –P
Master Income Update -
Friday, 11 February 2011
Hello there!
Holy moly – are these Friday’s a day of button pushing for me or what!?
Seems all day it’s fingers busy at the keyboard and mouse…well let
me tell you some of the things I’m doing and adjusting on our MIT
style trades.
For one thing today – NFLX is just a possessed beast…and we’d have
to loop in BIDU in the category…not to mention a slew of other names
that are just growing and swelling the ‘ol bottom line out there today!
Today I’m:
Rolling out of BIDU (20 of the 70), buying back today’s 120 calls and
selling 20 of the 130 calls for Feb (next week).
I am rolling out of 100% (10) JPM 46 calls and selling next week’s
47 calls.
I am rolling out of 10 NFLX 220 calls that expire today and selling
next week’s 230 calls.
I am rolling out of 10 NFLX 225 calls that expire today and selling
next week’s 235 calls.
I am rolling out of 10 (100%) LVS 47 calls for this week and selling
next week’s 47′s.
I am rolling up 100% of my protective puts in AMZN…that is, I’m
moving them up from the 155 strike the the April 165 put strike.
I’m also overwriting on IBM, selling next week’s 165 calls while
keeping today’s and watching them expire worthless.
There’s also a zillion spreads and rolls, etc that keep me very
occupied during these Friday’s – which is one of the main reasons
why it’s nearly impossible to get to this update in the a.m.
Okay – we’re set for a new week to hit! –P
Master Income Update -
Wed, 9 Feb 2011
Good morning!
Well on this day of some red tape – there’s a few names that we’re
in that happen to be well into the green!
And why is it that the likes of NFLX and BIDU happen to be in the
green?
Well the overwhelming factor is that they both reported jump-out-of
-the-gym numbers for earnings and future forecasts…and the market
just couldn’t get enough…basically these 2 names broke out of
being stalled in some sideways action for quite a while…and it
looks like a new uptrend and push is in place.
And when we trade these for income…a: we can leave them alone
during that week where the announcements (earnings) are going to be
made…and then as we see these breakouts, we can adjust which strikes
we sell week to week to allow for days like this (sell out of the
money calls is what I’m trying to say).
So with that said – let me tell you what I’m doing today.
(ps, we can act/trade/adjust today for next week, because next week
is the normal Feb. expiration!! )
Out of the 70 options I work with weekly on BIDU (on the 7,000 shares),
I am rolling the 20 I have at the this-week 115 calls…I’m buying
these back and selling the Feb 125 calls.
I still have 40 of the this-week 120 calls (and 10 already at the
Feb 120 calls…these are all the sold ‘covered’ calls for BIDU).
I’m also kicking ass on the PCLN and NFLX trades.. especially on the
puts that I’m selling (put spreads). PCLN, for example, is an all put
spread as it heads into earnings on Feb 17. I do a ton more active
trading in names like this for my Pieces of Eight members. It’s all
the weekly based stuff I profit on as these weeks keep rolling by,
and doing put spreads doesn’t require owning the stock!
With AMZN strong today too, I will be rolling out of these calls (not
to mention the NFLX calls), but when stocks get this hot, there may
just be some profit taking over the next few days..
So I’ll updates you on these names when I roll the calls out.
Ok – I have to run – I hope this finds you well!!
–P
Master Income Update -
Monday, 7 February 2011
Hello,
This is another one of those days where I’m real happy with how
the current positions are going.
Which means I’m not doing much of any adjustments or trading today,
or am I on the lookout for new trades (not just yet anyway!)
At the end of last week, I sold 220 and 225 (half and half) calls
on NFLX for this week.
When there’s a breakout like this – I sell these out of the money
calls like this to give the stock more mobile upside room. This
price action and volume don’t lie!
On Friday, I basically rolled and adjusted on each current MIT
position into these at- to out- of the money calls.
On AMZN, I sold this week’s 175 calls. On BIDU, I’ve sold 40 of
the this-week 120 calls, 20 of the 115 calls and I have 10 sold
at the normal Feb expiration 120 calls. (70 calls for 7,000 shares).
And also I rolled to the this-week FAS 31 calls (I would do the
$32′s if I were rolling them today).
On IBM I’ve got the 165 calls sold for this week.
On JPM I’ve got the 46 calls sold for this week.
(both the above are 1,000 share positions).
I’m also doing a 1,000 share MIT on LVS. I’m selling the 47 calls
for this week (I’m also selling the 46 puts for this week too, but
that’s extra and a little advanced ;)
Okay – that’s it for today. I hope you had a great Superbowl
Sunday and weekend!
–P
Master Income Update -
Thursday, 3 Feb 2011
Hello!
Its a busy day out there when you’re in the weekly world, so here’s
the run down of what I’m doing today:
I’m rolling out on AMZN, buying back this week’s 170 calls and selling
next week’s 175′s.
On BIDU, the rolls I’ve done (and new call writing I did because I
didn’t have a full slate of calls sold this week because of earnings)
is resulting in 50 of the calls being sold at next week’s 120 calls
and 20 of the calls being sold at the 115′s. (I’m long 7,000 shares
in BIDU). That’s how that is breaking down..
On NFLX, it looks like this week’s 215 and 220 calls will expire
worthless. I am overwriting today, selling 10 contracts of next
week’s 215 calls.
I am also overwriting on all of my MSFT, selling next week’s 28 calls
and letting this week’s 28 calls expire worthless tomorrow (or so it
would seem how stodgy this one moves every trading day).
YHOO, who’se been a sleeper, is catching a bid and moving higher,
peeking its head up and over the major moving averages. There’s no
weeklies, but earnings aren’t until April and there’s also lots of
call buying taking place out into the April calls.
I get very busy on days like today because in addition to the MIT’s,
I’m trading and working out a bunch of trades in other weeklies where
I’m doing various forms of spreads, and I might add, kicking some
major hiney with them using very similar set-ups (reasons why) for
the trades, but then using weeklies, with protection, etc.
That’s what St. Augustine was all about – and what the rest of the
tour stops of the “Overpaid and Unemployed Tour” are all about!!
You really need to get your eyes opened to all the opportunities
oozing out there. The next whistle stop will be in Chicago — a
“can’t misser”!!
Check out unemployedtour.com for all the details and let’s meet up
one of these days!!
All the best, over and out for now, –P
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