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Nothing presented is financial advice, trading advice or recommendations. Everything presented is the author's ideas only. The author accepts no liability for its use including errors and omissions. You alone are solely responsible for your own investing and trading. There are considerable risks involved in implementing any investment strategies and losses can be large. Trade at your own risk.

Apr 16 2011  / April Options Expiry Results

Options Expiry Results - April 2011

Stocks: Clorox, Exxon, Coca Cola, Intel, Johnson & Johnson, McDonald's, Merck, Microsoft, Nucor, Visa

   

April Options Expiry Results

Friday was April options expiry. Since February I have slowly been reducing the amount of capital I have been using and the number of contracts that are in the money are also declining.
A lot of my Canadian stocks still have to be brought up to date on my site, but most of my US stock portfolio is now up. Here are the highlights:

TOTAL CAPITAL IN THE MONEY DOWN 45%

Friday was an exceptional day. I only have a handful of naked puts that remain in the money as I have slowly been reducing those naked puts that are in the money. 3 months ago I had $127,821 of naked put options in the money and at risk of assignment. As of April options expiry that amount is now reduced to just $69,300. This is a 45% reduction in exposure to assignment. It is readily evident how important naked put strategies for rolling options are. By rolling those naked puts that were caught in the money, and reducing them on each roll, it not only releases more capital from possibly assignment, but also gives the stock time to recover. In my case the reduction of in the money options was through a combination of rolling and reducing naked puts on each roll as well as some stocks recovering and leaving my once in the money naked put, now out of the money to expire. This is just one of the many ways in which I believe naked puts are superior to covered calls

TOTAL CAPITAL IN USE DOWN BY 178,000.00 or 27%
NO MARGIN BEING USED AT ALL

Meanwhile in keeping with my strategy of the cautious bull with options expiry on Friday more than 178,000 is left not invested. I currently have a total of $178,000 plus my profit this year of $35,000 for a total capital of $213,000 for investing purposes. This leave me with a lot of capital to look for bargains during the next two weeks.

TOTAL RETURN TO DATE US PORTFOLIO 5.49%

Four months into 2011 and I am up 5.49%. Not quite half way to the 12% I am looking for this year. Overall I feel pretty comfortable. I have released a lot of capital for more investing and we are starting into the last half of April. With this much cash available and the May to July weaker period looming there may be lots of opportunity ahead.

Here's how my US portfolio fared:

On Friday all of my naked puts on Clorox expired, I will take it slow with Clorox and here is why.
On Friday my naked puts expired on KO. But KO has had a nice run up and looking at the chart I feel it is best to wait.
On Friday my naked puts in XOM expired. I sold another 5 naked puts but based on the chart XOM may need higher oil prices to move up.
On Friday my Intel April 19 naked puts expired. I sold just 5 naked puts for May at 19.00 as I expect possibly a bit more downside with Intel and a chance for higher premiums over the next week or so. At $19.00 Intel makes a compelling trade.
JNJ naked puts had to be bought and this time I rolled them to October. I had calculated whether it was better to accept the shares or roll them out. The decision was easy as you can see by my notes. My chart tells it all. I am looking forward to seeing how this trade works out.
McDonald's is an easy decision, The chart told me what naked put to sell for May.
Staying out of Merck for the time being is simple looking at the chart. I have done incredible well, but Merck's chart looks poor right now for naked put selling.
The trade on Microsoft on Friday was excellent. 20 Naked Puts expired freeing up 49,500 in capital. I then sold 5 contracts for May. The chart on Microsoft looks just great for more opportunity ahead.

My Nucor trades continue well. This month all 10 contracts expired, but the chart is anything but inspiring on Nucor. I sold 5 naked puts in May, and I will hold back the rest of my capital for a week and see what develops.
VISA is an exceptional ongoing naked put trade. All my contracts expired again and I decided to look back a year on the charts to see if I can pinpoint support. I sold 5 naked puts on Friday and I am holding back another 5 naked puts for next week to see where the stock goes. 

 

Disclaimer: There are considerable risks involved in all investment strategies. Trade at your own risk.
Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed or presented are financial advice, trading advice or recommendations. Fullyinformed.com is a private website. Everything presented and discussed are the author's ideas and opinions only.
By using this site, you agree to be bound by its terms of use. The full terms of use can be read here. If you do not agree to the terms of use, do not use this site. The author of fullyinformed.com assumes no liability for topics and ideas discussed, errors and omissions, ads and their content and external links. Any corporate insignia used are registered trademarks of their respective company or corporation and are being used for identification purposes only. All material copyrighted by FullyInformed.com. Reproduction in whole or in part prohibited. Copyright 2008

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