Master Income Update -
Friday, 23 September 2011
Greetings again -
Whew…that was a week we had – and I’m ready for a power nap and maybe some sleeping
in during the weekend!
One of the craziest things this week was the action in AMZN. After rolling last week, I
promptly saw AMZN just race higher for a few days leaving my sold calls in the dust.
I thought, here we go again, this thing’s just on fire. But I left everything in place, only
to have the market fall down hard like it did.
As it turns out, these way in the strike prices (the 230′s and $220 calls) are now out of
the money (the $220′s slightly). So I’m rolling right here the $230′s into next week’s
$225 calls.
I’m waiting to roll the $220′s as they are dancing around the $220 area now with like
$1.50 in premium still left in them.
I want to give AMZN some room to run to the upside. Still all the reasons and buzz are
there for this stock, and once there’s a little more market clarity, I see AMZN recovering
some ground in a hurry.
So I’ll be rolling all my AMZN to next week’s $225 calls.
I had rolled my BIDU calls yesterday and rolled out to half of the $130 calls and half of
the $135 calls when BIDU was down $6 on the day (it ended up finishing down $12 on
the day!)
BIDU’s at $123 and change – and I’ve got most of my puts at the $140 Dec. puts, then
some at the $125 puts and $120 puts.
On FFIV, I’m rolling to next week’s $75 calls. (all)
On JPM, I’m rolling all to next week’s $30 calls.
On LVS, I’m rolling half to next week’s $45 calls and half to the $46 calls.
On NFLX, selling two sets of calls (vs. the stock I’m long) was eating up some margin, so
I’ve got next week’s $140 calls sold. These are $10 out of the money – but you never
know when NFLX is going to flex some muscle.
By the way – the action in NFLX was soooo veeeery one-sided, and it happened as fast
as a lightening bolt. This one-sided running to the other side of the boat sets up it’s
own set of reasons where NFLX could cover $20, $30 or $40 of ground…and when you
least expect it. This is a very interesting situation.
My put protection in NFLX continues to be the Dec $190 puts. NFLX trades for around
$130 right now.
And I rolled my RIMM to next week’s $22 calls.
That about sums it up! I plan to be on here more than I was this past week, so look for
more updates come next week!
Hope you have a great weekend now, –P
Master Income Update -
Thursday, 15 Sept 2011
Good morning,
Like I was telling some friends at the beginning of the week,
just wait…there’s bound to be a shocker this week.
And while the overall market is making some great paces (in
fact, I noticed this morning that there’s been a one-grade
improvement in both the Nasdaq and S&P 500 accumulation
score)…
The shock stock today is in NFLX.
A lower subscriber guidance number…
Complete with trading curbs (as far as shorting the stock,
they put the uptick rule in place earlier today).
Basically – the masses are filing out of the stock, and they
can’t do it fast enough…just like a crowded theater trying
to leave a movie when it’s over.
The good news is, I’ve got 10 December $190 puts and 10
Dec $200 puts. I left these puts on tight like this because
of the slip-shoddy look of NFLX these past few months.
But today’s the doozey…and here’s what I’m doing. At
about the $180 area, I sold 10 Oct $190 calls. I also bought
back all my calls for this week, which were around a nickel.
As NFLX has dropped some more, to around $175 right now, I’m
going to wait and see what it looks like near the end of the
session today.
Since I see this action today as a broken bone, I don’t see
a quick-fix, turnaround where the shares just giddily trade
back higher. I see the stock limping around, if not going
lower for a spell.
But on any given day, it’s impossible to know how much of a
range it makes.
But my grand scheme here is to BOTH sell these October calls
AND sell weekly premiums. Basically doubling up on the income,
while keeping these puts in place.
Thanks alot NFLX. There you go trying to out-smart all your
investors, but we’re going to out-smart you right back!
If the margin is a problem, out of the money calls can be
purchased, or, in portfolio margin, you can tighten up some
puts on OTHER stock positions.
But that’s my plan here.
RIMM announces earnings after the close tonight, and I’m
buying back the $31 calls I sold late last week. I only
have Jan 2013 $25 calls for a position here…if I don’t get
an upside move in RIMM, I’ll just go back to selling weekly
calls like before. If there’s a great move, I’ll consider
adding to the position (buying more LEAPS perhaps).
I’m rolling out of AMZN and some of BIDU right here. AMZN
is a stock that could cover some more ground heading into
it’s earnings announcement in Oct.
The overall market is firming. And AMZN has some buzz up
it’s sleeve as it’s about to unveil a brand new tablet
(a tablet tablet, not just an e-reader like the Kindle).
This anticipation already has it trading a few bucks shy of
a 52-week high…I’ll bet any day here, this stock may make
a fresh, new breakout.
Okay – that’s it from me. I hope all this stuff helps, as
they are real moves being made out there in the real world!
Over and out, –P
Master Income Update -
Wednesday, 14 Sept 2011
Good morning,
I made mention of the following set-ups to my Pieces of Eight
members, but also wanted to share with you as it involves
MIT trading!
You know, some of the best ways I like to trade weeklies
involves centering a trade around a certain, future compelling
event.
With weeklies, you can now, for example, do a calendar spread
on a stock that likes to run higher in anticipation of
earnings. Instead of buying a 6 month option and selling
monthlies..
You can buy a 1 month option and selling 4 weeklies against
it.
Anyway – with that said, there’s the annual CES (Consumer
Electronics Show) coming in January (held in Las Vegas).
This is the show that Apple doesn’t attend because they have
their huge MacWorld that goes on at about the same time.
(which has been a compelling, upcoming event for YEARS when
it comes to trading APPL!)
Anyway – with the snazz, jazz and buzz regarding all the
upcoming new fangled gadgets, they all need new chips to
run them…and that’s why I’m looking at the likes of NVDA
and INTC right here.
Both have weeklies. And both have been knocked down to size.
In the case of Intel (INTC), it just looks like the normal
ebb and flow inside a rather defined channel (the dividend
yield here, incidentally chimes in at 4.1%!).
INTC has simply hit “support” (hell, I thought I’d never say
that word on here!) – but the point is, it’s coming offa
there – and looking forward, it looks like it has every
reason to make a sustained upside move into January
(for the past few years, it’s done just that).
For NVDA, here’s a stock that’s all been forgotten – it’s
really had a miserable year. But…
…is that a little perk up I see? It is. And what more
to spark this stock than the coming frenzy that is the CES
spectacle on a few January days in Vegas?
So how to trade? For MIT it’s super straight forward..
There’s some strong reasons these stocks should both creep
up higher between now and January. In the case of INTC, the
dividend stream is a bonus…but you can simply to the “8
Days a Week” by selling new call premiums each Thursday,
selling at to out of the money (with $1 strike price
increments, there’s lots of strike price choices!) it will
allow for some growth in the stock week to week.
Same for NVDA.
What I LOVE to do also is be a put seller week to week,
taking in premiums, and if the stock gets put to you (the
goal), you end up owning the stock at a discount, then you
turn right around and start selling the weekly calls.
But the reason why for a certain stock at a certain time is
still key.
And I wanted to share with you both these stocks and reasons
why at this point in time on the calendar!
–P
P.S. I’m starting to sell puts on INTC for this Friday, the
$21 puts.
Master Income Update -
Friday, 9 Sept 2011
Good morning,
At least it’s still morning here. A beautiful morning, but
more of the same ‘ol scared, stale, stiff market. Today,
the DOW dips down below the 11,000 mark.
The market, meaning investors, risk-takers and capitalists
HATED that jobs speech last night.
It’s another Friday, and it’s more drama for the markets!
Lucky for us we have solid-as-a-rock puts underneath all our
positions out there.
And we trade week to week on the present factors at hand.
This is the main reason I didn’t do hardly any trading
yesterday. That speech was going to be in the evening, then
today on Friday – the whole world was going to react to it.
I thought I’d shout out a run-down of all my current MIT
positions. How I’m positioned with puts, and what I’ve
sold for this next week.
I’ll just start from the “A’s” and work on down:
AMZN: 2,000 shares. AMZN at: $211
I have 10 Sep 215 calls sold for next week
I have 10 today’s $210 calls that I will be rolling before
the end of the day. I’ll likely roll to a near-the-money
strike.
For puts, I own 10 Oct 190 puts and 10 Jan 2012 $180 puts.
BIDU: 6,000 shares. Currently $143.40
I’ve got 10 $145 calls expiring today
I’ve got 30 $140 calls already sold for next week
10 $145 calls for next week
10 $150 calls for next week.
The puts are:
10 Dec 110 puts
10 Dec 115 puts
10 Dec 120 puts
30 Dec 140 puts
FFIV: 1,500 shares, plus 5 2012 Jan 100 calls.
I have 15 Sep $75 calls sold.
I own 15 Oct $70 puts.
FFIV trades at $74 today.
JPM: 2,000 shares. Trades at $32 and change right now.
I have 20 $32.50 calls sold for next week.
I own 20 Oct $35 puts.
LVS: 2,000 shares. Trades at $46.60 right now.
I have 10 Sept 47 calls and 10 Sept 48 calls sold for next
week.
I own 20 Dec $39 puts.
NFLX: 2,000 shares. Currently around $204.78
I have 20 $210 calls sold for next week.
I own 10 Dec 190 puts
I own 10 Dec 200 puts
RIMM: (small position) I own 5 Jan 2013 $25 calls.
(no puts)
I have the $31 calls sold for next week.
RIMM trades today around $29.79.
Like I said earlier. Protection, protection, protection
PLUS brining in our weekly premiums ($7+ in the case of
NFLX sold earlier this mornintg…for ONE week) – and the
math just works in our favor over time!
Over and out for now, –P
Master Income Update -
Tuesday, 6 Sept 2011
Good morning,
Well…
Having that long break of a weekend, and coming back refreshed and ready to go, only
to wake up to our direction-less, conviction-less market,
Well, it’s sobering!! And sad.
And having that break reminded me of something, something that’s real hard to do…
And that is, just taking a break from the market.
Just “checking out” and filling the brain with rest and relaxation away from this multi-headed
monster of a beast.
Mostly for the health and sanity reasons!
I remember back in the day, when I was mostly a directional trader (in the pre-financial
meltdown/Obamanomics days) that’s exactly what the doctor would order. And I
remember how refreshing and NEEDED breaks were.
When things didn’t feel right, just not doing anything!
In all reality today, with income positions and protections on, true breaks aren’t
realistic.
But I’ll tell ya what’s getting ooooold. Seeing those distribution grades just pinned
down on the matt at “E”. And also, I’m getting real tired of seeing (and sensing) all that
real pain for everyday folks.
It’s not a fun economic time for most people.
We got hard times out there, where you can feel it in your own neighborhood.
And for all their forward-looking-ness, stocks don’t seem to be hanging their hat on
much of anything.
So here we sit! Having week after week grind on, with little heat-ups here and there,
only to see them fade and cool.
All I’m saying is – I’ve been around for a long time, and I can’t remember more of a
dismal feel when it comes the day to day action.
Maybe this is an indicator in and of itself?! When I get provoked to write shit that’s all
gloomy?!!
By the way, can you imagine how dismal it’s gotta feel out there for those who don’t know
about put protection, or income generation? Who just sit there and take it, all the
arm twisting and bullying?!
I know there’s always great stuff to comment on, and I’m usually that glass is half full
guy. But sometimes I just feel like calling a spade a spade.
You watch…the market does a sudden rally today and finishes in the green.
!?!?
For what it’s worth.. I’m rolling my Sept Week 2 $80 calls in FFIV down to the $75 calls,
and I’m going out to the normal Sept expiration (monthly) Friday.
I had also sold some puts on ARCO (a trade I still like), but I’m buying them back to clear
some margin room. These would be the Sept $30 puts.
Also, I’m buying my FAS puts back. I did a bullish spread last week on FAS (the banking/
financial leveraged ETF), but buying this one back…also, to clear up some margin.
For such a severe drop in the Nasdaq this morning so far…I’m pretty shocked to see
NFLX up in the green on the day, and both AMZN and BIDU to be down so mildly.
This likely means these stocks have muscle and aren’t going down much in the near
future.
All I’m sayin’ is I’m just sayin’! –P
P.S. At least football is here to save the day!
Master Income Update -
Thursday, 1 Sept 2011
Good morning!
There’s some important things to remember as we wend our way through time with a
full slate of MIT type trades (especially when you consider portfolio margin).
That is…
When there’s a week of updraft, you want to look at adjusting both puts and calls.
Meaning…
If you’re trying to roll up and out of a call that’s now really in the money, it can cost a
lot of intrinsic value temporarily (if the stock kept going up and up and up, the MIT
strategy sucks…the MIT strategy is built for the Obama economy for lack of a better
explanation!)
But back to rolling up and out of the calls…
Once you adjust the puts up a few strike prices, your buying power increases, which will
then allow you to adjust the calls (again, if buying power is an issue).
For example, I’m noticing this morning that one of my NFLX puts is fully $55 out of the
money. In moving this up $15 bucks (or 3 strike prices), it costs some money, like $3
bucks and some change, but it also clears $15 more (times 1,000 shares on 10 contracts)
which is $15-grand.
So with that in mind, here’s what I’m doing so far this morning:
I’m rolling my entire calls in JPM from this week’s $36 calls to next week’s $38 calls.
I’m rolling my entire calls in FFIV from this week’s $72.50 calls to next week’s $80 calls.
I bought 5 RIMM LEAPS, and I’ve been selling 5 weekly calls against it, just to see how
RIMM would react after that 52-week low, absolute catastrophe of a month ago or so.
Anyway, I had sold 5 $30 calls for this week, and I’m rolling these to next week’s $33
calls. (the LEAPS are growing pretty damn nice now…mostly due to rumors of RIMM
getting bought out).
I am moving up half of my puts on AMZN. This is 10 contracts, rolling up Jan 2012
$160 puts to the Jan 2012 $180 puts.
On BIDU, I’m rolling out of 10 more calls (I rolled out of 10 yesterday, which leaves me
40 more to roll out of, which I’ll be doing tomorrow). Anyway – on these next 10, I’m
rolling from this week’s $135 calls to next week’s $145 calls.
On NFLX, I moved up half, or 10, of my puts from the Dec $185 puts to the Dec $200
puts. On the call side, I’m rolling 10 of the $220 calls to next week’s $240 calls.
(Yesterday, I rolled 10 calls to the Sept $235 calls…that’s the normal September expiring
options).
Another thing I’m keeping in mind is the earnings month of October. I’m thinking/seeing
that stocks could see-saw here, especially after how hyper they got last week.
Anyway – I’m keeping in mind that some big name T-Rex stocks could really start to
swell up in the month leading into October earnings.
One stock that is really rockin’ and a rollin’ is AMZN. Seems the street is really getting
excited about it’s cloud services – my intuition here is that AMZN is building into a sweet
spot of sorts where it could really cover some ground. Especially after how it’s stock
got punched so hard in the gut recently (like ALL stocks did!)
Take that and a quarter and you could probably call home to Mom and tell her!
I’m not sure what that means, but one of my college football coaches used to say
something like that – and I always kind of scratched my head!??
Over and out for now,
–P
