Master Income Update
Tuesday, 28 June 2011
Good morning,
This week I’m away with my family on vacation (and then a little bit of next week too).
We’re here in Times Square and doing all things New York for the next couple of days and
it’s really fun and a ton to see (I can tell by how much my kids are sleeping in the next
day!)
Anyway – it’s nice to see the market get off to the start it is this week. While the volume
didn’t really come in for yesterday (Monday), the leaders are sure making some statements
in today’s action. But we’ll have to see where volume finishes too.
I’m not doing that much trading as I’m not in frequent touch with the computer, etc.
But you really don’t have to be when you have weekly positions on. The most important
days being Thurs and Fri.
If we do get a nice two grade move in A/D, I will look to increase the amount of bull
put credit spreads I’m doing on my current positions.
I believe I mentioned the Apple calendar spread on here…and while the first little while
with this trade was as bumpy and rocky as could be – it’s kicked into a new gear now and
it’s making the Benjamins flow.
Anyway – wanted to check in and tell you about my schedule for this week. I’ll look to
get on here and let you know how I’m adjusting and rolling out of stuff.
Over and out for now!
–P
Master Income Update -
Friday, 24 June 2011
Call this week the whirlwind. Never mind the market, it started with my best friend’s
B-day (on Father’s Day), not to mention Father’s day itself.. the next day was our 19th
wedding anniversary (no pressure for next year). Food poisoning the next day with family
in town, next day flat on my back but managed to get off the floor for my daugher’s
major dance recital that night. The next day…my son turned teenager, …and
Is it time to take an exhale yet!?
Holy smokes!!!
We’ve got another drama filled Friday on our hands – but here is how my positions are
rolling and adjusting out..
I guess I’ll start with AAPL, cause it’s in the “A’s”…but with the action this stock had and
the ground it covered (this is the calendar bull put spread, fyi ) –I was able to buy these
back earlier today and sell next week’s $330 puts. A great week of movement for AAPL!
On AMZN, I’m moving into half and half of next week’s 190′s and 195 calls. I’m also
selling 10 of next week’s 190 puts (with the 180 puts as protection) for a bull put spread
add-on (or “continue on” as I’ve done this for many weeks here on AMZN).
On BIDU, I’m selling 40 of next week’s $125 calls and 30 of next week’s $130 calls.
On FAS, I’m overwriting, selling the $23 calls for next week and letting the $24 calls for
this week expire worthless. FAS trades for $22.70 right here.
I have the opposite of FAS in FAZ. But FAZ I either sell naked weekly puts or have a
calendar underneath (a 1 month put for example). I had 10 $49 puts sold for this week,
and I’m selling next week’s $50 puts (and doubling from 10 contracts to 20). I own 20
FAZ July puts, 10 $42′s and 10 $43′s, fyi.
On FFIV, I’m rolling to 10 of next week’s $105 calls and 5 of next week’s $110 calls on the
entire 1,500 shares here. I’m also doing weekly put spreads here for income (this past
week’s income was stellar and killer…and made me say “finally!”)
On JPM, I’m overwriting on 100% of it…I’m letting this week’s $41 calls expire worthless
and selling the $40 calls for next week.
On LVS, I’m rolling into next week’s $39 calls on 100% of the 2,000 shares here. (this one
also has put spreads week to week which I’m rolling…I’m selling at the money’s or darn
near every week).
On NFLX, I’m rolling 100% of my calls from the $250 calls to next week’s $260 calls.
You gotta like how NFLX hasn’t been in any damage as far as it’s trend goes. It’s held up
extremely well with all kinds of other names really feeling the heat.
I rolled out my RIMM calls to next week’s $29 calls. This is the call writing that I’m doing
on the 5 RIMM LEAPS I bought…just trying to get some income in the door weekly as it
sits here on the flounder.
That’s what I got on the MIT side of things. I hope you have a great rest of the day.
–P
Master Income Update -
Wed, 22 June 2011
Hello,
For today, I’m just now able to actually get dressed and function somewhat normal.
I spent last night throwing up -basically I ate something super wrong yesterday. And its
been a bit miserable!!!
Anyway – I wanted to comment on yesterday’s about face out there. Basically, it snapped
right back into place the likes of AAPL, FFIV, AMZN, NFLX, BIDU (and then some) – and a
host of others.
It looked and felt like a capitulation day. But over at IBD, they didn’t think so. They say
that the volume wasn’t enough to “count” yesterday’s action for anything special. It also
didn’t register on the accumulation/distribution grade for either the S&P 500 or Nasdaq.
They also say that June has been a crummy month for sustained moves higher after a
day like yesterday, saying that the market’s 0 for 4 during June spanning the past few
years when there’s been action like this.
Then the market muted a bit today because of the FED news, or lack of news.
I moved 10 of my BIDU Sept $130 puts to the $110 (Sept) puts, doing so to lock in the
put’s profit as the stock vaulted up there yesterday.
I also got pretty darn lucky on an entry into PCLN during yesterday morning, but doing a
“calendar” put credit spread.
In English, what this means is with PCLN’s wake up call yesterday (along with all the many
more tech names) – I see investors bidding up this name (and the stock to remain super
volatile) as the reality of their next earnings announcement starts to creep up on us.
(PCLN’s earnings are Aug 3rd approx).
This is very similar to the Apple trade and all the reasons I explained on here why I did
that calendar.
Things will be eventful for tomorrow and Friday and the new weeklies come out and we
get positioned into next week’s positions!
I’ve layed low for most of this week, with yesterday’s action really snapping a lot of my
positions right back where they needed to be.
Over and out for now, –P
Master Income Update -
Friday, 17 June 2011
Hello there,
Well after a few days at scout camp this week (missed nothing but a bunch of surging
and pulling back in the market!) – we arrive here on Friday.
Here’s what I’m doing on my major positions:
I think it’s more of the same here and the direction to take is to be defensive, defensive,
defensive.
Over on BIDU, I’m selling 100% of my calls for next week’s $120 calls. Over on NFLX,
I’m selling 100% of my calls for next week’s $250 calls. On AMZN, I’m moving to the
exact same strikes as I had this week…half at the $185 calls, half at the 190 calls.
Those are the biggies. Here’s what else I’m doing today:
On FFIV, I’m selling 100% of my calls for next week’s $100 calls. (today’s $110 calls are
waaaay out of the money and I’m letting them expire worthless, so this is an ‘overwrite’)
On FAS, I’m selling next week’s $24 calls (overwriting here as today’s $24 calls look to
expire worthless).
I’m getting out of NVDA…I own the June (today’s) $17 puts, and had this week’s $17 calls
sold. As it turns out…these puts are worth something, so I’m simply selling the puts to
close. Buying the calls back (for a penny here), then selling 2,000 shares of stock.
I’m selling new weeklies on LVS, selling next week’s $39 calls and letting today’s $40 calls
expire worthless.
I’m rolling out on JPM, buying back the 40 calls and selling next week’s 41 calls.
–P
Master Income Update -
Monday, 13 June 2011
Good morning/afternoon,
Over the weekend I had a long time to think about a lot of things market.
I read the headlines probably like you did about how Friday’s action took basically all
the gains away for 2011. How this 6 week slide is the worst dating back to like 2002, etc,
etc.
And another suckey factor is – this hasn’t been a sudden jolt lower, just a steady drum
beat. So it hasn’t yet raised that fear gauge, for that day of capitulation where you can get
long after that throw in the towel moment.
The market right about now is lifeless and about as exciting as a used, wet shower towel
shriveled up on the floor (we see a lot of these on the carpet with teenagers, and approx.
17,000 threats hasn’t changed this behavior).
It’s times like these where the concept of put protection comes into sharp focus.
We’re living in that gray, unknown time that you had that feeling about.
That rainy day is here, that un-ending funky market where stocks keep slipping and
sliding down the hill like a 13 year old on a block of ice — is here.
It’s here in spades every day we wake up.
This past weekend I was thinking about the times where I’ve had a full boat of puts and
how I wish I didn’t have them when the underlying stock made a sudden jump higher.
What a pain in the ass it was to roll out the calls, etc.
We made money, but if the stock really motored up and out, the top side (short) calls
limit your gains, plus the puts lose some value.
But when it gets like this outside (cold, rainy, dreary, shizzle-y), you get reminded why
this downside insurance is right there, ready to save the day (and your hind end).
Take BIDU for example. In early trading this morning, this one looked like it was getting
a little lift. And now when I just checked in on it, it’s down $2 bucks, continuing it’s
wicked slide.
Yet at $118 a change, I own the 130, 125 and 120 puts clear out til September. And due
to many many weeks of selling weekly call premiums, this insurance has been paid for
long ago.
And basically, BIDU can do whatever the hell it wants – and while it figures itself out, I’ve
got the damn thing bound and gagged. AND, I get to reap weekly income on it too.
For more on this, I got this question earlier today…and I answered it and wanted you to
take a look.
The question was basically about if I adjust my protective puts during times like this, and
if so, when and why, etc. Here’s my answer:
Yes I do, but it depends.
Mainly it depends on how “damaged goods” the stock is. The more crunky the damage,
the more I will stick with the puts right where they are (and keep selling the calls for
premium). I also weigh in the overall crappy market (market cycle) too. Which is
damaged goods right now too.
If the stock is just suffering some blowback, but hasn’t been damaged goods, and the
overall market is strong, I consider adjusting (cashing in) on the puts and repositioning
with lower strikes.
In BIDU’s case right now, in my account there’s next to zero risk on the downside,
so I’m content to keep selling weekly call premiums, basically harvesting income, the
income I so deserve because of all the structuring costs to have this position protected
in the first place.
I hope this helps! –P
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Master Income Update -
Part 2 – Tuesday, 7 June 2011
Hello!
Well I’m checking in here with around an hour before the close. It’s been real nice to see
some leading type stocks do some surging here.
It’s kind of interesting to see AAPL get it’s reaction to their cloud plans today (granted,
the stock DID build up and run already in anticipation to this conference…and it’s really
not down or off THAT much given it’s a $333-$334 stock!)…
But on this same day, the other main cloud players (the backbone providers, etc) like
FFIV are kicking some tail and covering some nice ground! As you know I’ve got an MIT
in FFIV, selling the weekly calls – and on different weeks selling bull put credit spreads.
And AMZN (cloud), CRM (cloud), VMW (cloud), RVBD (cloud), CTXS (you’re starting to get
the picture) – are all tracking higher today.
Since I had brought up AAPL on here in regards to a put credit spread…let me tell you
how I’m dealing with the stock being down.
First of all, I structured this as a mini-calendar spread into June. This is a fancy way of
saying that my protective puts are at the June expiration, while I sell weekly puts leading
up to that expiration day.
Not to be forgotten is the premium that already was banked for the prior week with this
trade.
As it sits here, it’s in the red, with the $345 puts sold for this week (with $335 June puts
for the protection).
And since we don’t have to wait ’til Thursday of this week to roll out (because the following
Friday after this one is the normal June options, which have existed for several months!)
that means – we can adjust this trade right now.
Which is what I’m doing today. Basically I’m buying back these $345 puts (that have next
to nil left for time value), and selling the June $340 puts in their place.
Also, what I plan to do is turn all or part of this trade into a July trade that will take
advantage of AAPL as it gets into that 30-day zone before their earnings announcement
(which will be in later July).
That would mean that in short order, I’ll be flicking/flipping these June $335 puts out
into July.
I just want to give you a head’s up right now and explain what my method and madness
is here.
AAPL probably chews on their latest news…but before too long, the talk will be of the
iphone5 and other shizzle that us degenerates crave.
So that’s what I’m angling to do on AAPL.
BIDU’s covered hella ground today as far as it’s daily range is concerned. Holy! (in fact,
just as I now went to check a quote on BIDU, I entered the letters H-O-L-Y instead of
B-I-D-U. I guess it’s subliminal or something!!!
Anyway – I’m really jazzed about sitting here in BIDU with puts all the way out there in
September…the 130′s, 125′s and 120′s. Because with all this daily and weekly volatility,
I can put this weekly uncertainty right in my front and left pocket – without a care in
this world of how far down the stock wants to travel!
Okay – time to run along. Remember, this week you can roll into next week at any time,
keep that in mind.
Over and out, –P
Master Income Update -
Thursday, 2 June 2011
Well, I’ve got two things to say today/Thursday:
1) Wow…what a week!
2) See #1.
In 3 trading days (3 in a row), the IBD went from market in correction, to market in
confirmed uptrend, to market in correction.
Volumes and price actions have been all over the rollercoaster. And as we near expiration
Friday for this week’s weeklies (tomorrow) – it looks like the time value components are
slipping and a sliding down in value – realizing how little time in left in the options life
(compared to all the volatility they were priced with during this crazy week just a few
short 24-48 hours ago!)
Anyway – so I’m sitting here waiting and watching for these values to flatten, which of
course, fattens our bottomlines.
(fattening the bottom line doesn’t sound so good…but then in the options world, it sounds
SOOO good!)
Here’s what I’m doing today in my MIT account positions:
I’m selling/overwriting new next-week options on JPM, selling the $41 calls and letting
my this-week $43 calls expire worthless. The banks are in a funk right now which is
why I’m selling slightly in the money options for next week.
(Goldman gets hauled up before Congress to explain again what it knew and when during
the financial crisis).
The Apple credit spread I did a few days back, and shared with you on here, is off to
streaming/flying colors. I’m adding to it today by selling next week’s $345 puts and for
the protection, I’m buying tomorrow’s $340 puts. This allows my current spread the
flattening (fattening) it needs, while getting a new weekly trade off to a grand start.
I’m rolling approx 25% of my BIDU out from the 130 calls to next week’s $135 calls.
I’m rolling out 20 of my 30 calls on NFLX, buying back this week’s $260 calls and selling
next week’s $270 calls.
You never know what’s around the next corner these days, be it a shitty government
report and then spin about how the economy’s coming back, or some hot spot flare up
in the middle east, or a zillion other “etc’s”…but you already know that!
So what we do is just take the actions that are right there at hand…and then try not to
sit there and beat yourself up about shoulda’s, coulda’s, etc.
It ain’t worth it!
Anyway – I hope this finds you well today! I’ll be back tomorrow chiming in on all the
remaining income positions. Over and out!
–Pirate
Master Income Update -
Friday, 27 May 2011
Good morning!
I wanted to send this out earlier than normal today for an important reason..
We have a 3 day weekend staring us in the face – and the option premiums will start
flattening premiums at around the mid-point of the day today. So it’s important to make
your rolling moves asap.
Given the market cycle right now, I’m looking to roll and/or adjust weekly income trades
to the closest at-the-money strikes as possible.
For instance, I’ve rolled all my BIDU to next week’s $130 calls. I’m rolling my POT to
next week’s $55 calls. AMZN to next week’s $195 calls, etc.
These are important FYI’s – and here’s to getting the bulk of your income captured here
during the morning trading hours!
–P
