Exxon Stock remains highly volatile and I have had some excellent trades these past three months. Exxon Stock trades on New York under the symbol XOM. XOM Stock is a member of the DOW 30. As next week approaches my $87.50 and $85 puts for April 20 look set to expire. I am probably going to close my April 20 $85 puts as soon as they fall below 5 cents which I expect on Monday as I am hoping to sell puts on the 18MAR13 $85 naked puts at $.95 and $1.00. On / Read More
Intel stock had a nice up day yesterday but it was the last push from those investors who are still celebrating Intel Stock’s earnings which were better than expected. Technology stocks in general did well yesterday but any weakness in the markets is going to bring selling into technology stocks and today Intel Stock was down 1.90% at the time of my writing this article. I am holding Intel Stock naked puts for July options expiry at the $24, $25 and $26 put strike prices. If I was Put Selling with the goal / Read More
A lot of investors look at covered calls as a very simple strategy. Buy shares and sell covered calls out of the money and if the stock reaches that price by the time of options expiry then be exercised, make some profit and look around for another opportunity to repeat the covered calls strategy perhaps even on the same stock. If the covered calls expire by the time of options expiry then sell another round of covered calls and wait again. Sounds good and certainly no problem with that covered calls strategy. What’s / Read More
As many readers are aware I have been busy working on Part 3 of the AGQ ProShares Ultra Silver article to conclude it. It took a lot longer than I had thought to write the final part. After 2 weeks, I have concluded the article which is 52 pages long and details out 4 different strategies that I have used and continue to use on various ETFs and on some stocks. While these strategies are designed for high volatility Ultra ETFs like AGQ, they work well for particularly stocks. For example last week / Read More
Recently I received an email from a reader asking the following about Put Selling: I’m trying to better understand your thought process on Put Selling and Options in General… tell me if I understand about Put Selling, per my example: Lexmark stock today $37.43 LXK Lexmark Puts, Currently the May $37 puts are selling for $1.70 Five contracts @ $1.70 = $850. I sell the $37 Lexmark Puts and earn $850.00. Stock stays below $37, I get assigned 500 shares at $37 = $18,500 (true cost $18,500 – $850= $17,650) Stock goes past / Read More
Exxon Mobil Stock remains highly volatile and as such keeps popping back up in my portfolio. Today (Nov 1) I took advantage of the volatility in oil and sold two sets of put contracts on Exxon Mobil stock. Exxon Mobil stock on October 4 2011 hit an intraday low of $69.21 and by Oct 27 it had risen to $82.20 before closing at $81.88. This is a move of 18.7% in Exxon Mobil stock. That move more than beat the move by all three indices including the NASDAQ which saw a move of / Read More
Market timing and market direction are the most important tool in my investing tool-chest. Nothing comes closer. My market timing and market direction call on Thursday Oct 20 in the evening entitled VIX MAY BE WARNING discussed my outlook for Friday for October options expiry and my general look at the trend in the market. I received a number of emails from readers and there were a couple of comments on the blog as well wondering why I bother with market timing and market direction. After all, on Friday I was looking for / Read More
Chevron Stock – Reader Question On His In The Money Puts Recently I received a question from a reader about Chevron stock (CVX stock) . I have edited his email and my answer to include it on my site as I felt it would be of interest to others when assessing their own situations when sold puts end up in the money. Often when investors sell out of the money puts and the puts fall in the money, it becomes difficult to decide what strategy to use next. Because of this many investors / Read More
Today’s action was interesting to say the least. Friday’s market pullback picked up steam right from the opening. However while European markets are being trounced almost daily, the US Market is hanging tough. I believe there is a lot more happening in this market than many investors are aware of. The latest chart which you can see below, shows that the market is still in a range. Since August 8 the market has hung tough and actually appears to be trying to move higher. The problem the market has been facing is the / Read More
XOM Stock while down 23% from its April 2011 high of around $88.00 is still a terrific performer for my strategy of selling puts for income. While the strike points I chose for selling puts in XOM stock may appear random to the casual investor, they in fact are by design based on historic patterns in Exxon Mobil stock. This design falls within my strategy of owning the shares at historic lows and paying for those shares through other people’s money, while keeping my capital safe from market swings and any losses. This is the second and concluding article which looks at a simple strategy that once understood by investors and implemented, reaps strong gains while protecting the original capital from losses.
Microsoft stock has been a stellar performer for almost 10 years. I have reaped double digit returns every years through carefully selecting put strikes to sell and earning capital which will one day assist in paying for the stock. The put strike selection though is not randomly done, but is through careful analysis of the history of the stock. Through such analysis I can work my position to the point where, if assigned shares, I will be in the stock at bear market prices which affords me the luxury of not just owning a great company at a great price, but also of being able to earn additional capital through selling covered calls. In a market as volatile as the past few years have been, stock analysis I believe is essential to preserving my capital as well as guaranteeing low valuation placement in stocks.
T Stock has been a favorite at various times this year, but the decision on Aug 31 2011 by the US Justice Department to block AT&T’s planned takeover of T-Mobile USA has created an excellent opportunity for a terrific naked put trade. Since I started put selling in T stock (AT&T stock) in January of this year, T stock has provided some exceptional earnings. If you look at the 2011 T stock trade chart you can review the put strikes points I have used in the past. Put selling at the $28 and / Read More
Illinois Tool Works Stock Option Trade How can a company like Illinois Tool Works Stock (symbol ITW) aid investors who are seeking better returns than money market rates or certificates of deposit (or in Canada – Guaranteed Investment Certificates) while having some comfort that their hard-earned capital won’t be lost in a stock market meltdown? Since the end of 2008, the Federal Reserve is penalizing savers. It has become the third year of basically minimal returns for keeping your capital safe. By now savers are realizing that there is little likelihood of a / Read More
I watched a number of my favorite stocks, including Coca Cola Stock yesterday. The market collapse didn’t push Coca Cola options as high in premium as I wanted. Today though was a very different story. The enormous wide swings in the market pushed down KO Stock and KO Options gained dramatically. I came close to selling the KO Options for September $62.50 as they climbed to $2.10 or 3.3% in value for 1 month. But after 35 years of investing in some pretty wild markets, I realize that the better choice would be / Read More
With Monday’s bear market collapse I am glad to welcome YUM Stock back to my US Portfolio. As long term readers might recall, in May of this year I sold puts on YUM stock and when they expired I indicated that YUM was over valued in my opinion and I would discontinue selling puts until the stock pulled back. Well the stock has fallen over the past sessions and with today’s market collapse it is below $50.00. This makes for an excellent put trade and with volatility almost at 50.00 today on the / Read More