Saturday, April 22, 2017

Expiring Options for April 21, 2017

All of my options for April 21, 2017 expired 'worthless', that's great since I sold calls and puts.  Mid morning, $IMO was trading just below my strike price of $40 and I did not want to get assigned shares, so I closed it early.  Later half of the day, $IMO soared back up above $40.  Doh, I could have made $10 more on that trade, but I had to head out on Friday for lunch and shopping and didn't have time to monitor the trade close to end of trading day.

Realized $342 CAD and $74 USD in premiums for April 21, 2017.

OptionAccounts (Position)
BMY 21APR2017 59.5 C(-1)
CGX 21APR2017 48 P(-1)
DOL 21APR2017 98 P  As always, I just watch it go up and up. (-1)
GILD 21APR2017 70 C(-1)
IMO 21APR2017 40 P (-1)
PEY 21APR2017 25 P(-1)
RCI.B 21APR2017 54 P(-1)

Monday, April 3, 2017

Canada's Big Three Telecom Comparison

Tax season is upon us.  This forces me sift through my trades for the year.  There were a few stocks that were bought in previous tax years, so I have to go back and find my average cost.  Over the years, I've traded brokerages like I have done so with my stocks.  I have lost track of my initial investments.

I used to buy bigger blocks than I do now.  I was fearless... then somewhere along the line, I got scared and started doing smaller trades as time went on.  I held a lot of good stocks back in the day and yet, my lack of patience got the better of me.  

Anyways, let's do a comparison on Canada's big three telecoms.  I used to own $RCI.B (200 shares) many years ago, but I sold them out for a few hundred bucks in profit.  If I only kept it, I'd be in much better shape than holding $T.TO (100 shares) that I currently hold in my RRSP for the past 1 year+.  Who are the leaders in each industry?  Who are best at retaining customers?  How are they growing their revenues?  

RCI.B +13.24%- 1yr 
T.TO +2.92%- 1yr
BCE.TO -0.35- 1yr

But when you compare them all in the five years time span, they all were pretty much on par with each other growing approximately 49%.  Patience wins over short term trading, unless you can pick winning trades after another.

Over trading can sure damper your gains.  If I had just held all the quality stocks I had bought over the years, I'd be in much better shape.  

We have had a great bull run for the past 8 years.  People have been calling for a market crash for a while now... it has yet to materialize.  But I would be cautious in adding positions at this level in case of an upcoming correction.  Take your profits and wait for the dips.  

Friday, March 17, 2017

Expiring Options for March 17, 2017

Welcome to my wonderful maze of options!  Most stocks that have options expire on the third week of the month.  Today is March 17, 2017 and I have lined myself up with a few expiring as follows:

OptionAccounts (Position)
BMY 17MAR2017 70 CU****211(-1)
ENB 17MAR2017 54 PU****211(-1)
GILD 17MAR2017 70 PU****211(-1)
INTC 17MAR2017 35 PU****211(-1)
KEY 17MAR2017 38 PU****211(-1)
KR 17MAR2017 31 PU****211(-1)
MDLZ 17MAR2017 43 PU****211(-1)
MGM 17MAR2017 25 PU****211(-1)
PEY 17MAR2017 27 PU****211(-1)
XOM 17MAR2017 79.5 PU****211(-1)

From this group, I will collect a total of $766 in premiums before commissions.  

$GILD and $KR closed slightly under my strike price.  I decided to take assignments for both of them meaning I will fork over $7000 for GILD and $3100 for $KR even though the market value is below that.  I believe both will come back above my strike price and I will sell them for a profit or I will sell covered calls to collect premiums along the way.  I haven't decided my plan of action yet till I see how the market is on Monday.

Monday, February 27, 2017

Cracker Barrel and Visa

These trades are within my Interactive Brokers trading account:

Personally, I haven't set foot in Cracker Barrel Old Country Store ($CBRL).  But I've done well with dining stocks before.  The yield is 2.85%.  This is a longer term hold for growth.

I sold a covered call on Visa ($V) out to Sept'17 with a strike of $95 to collect a premium of $231.  Behind the trade, I do not want to lose my shares but I still want to make some extra money out of it by collecting a premium along the way.

Thursday, February 16, 2017

Expiring on Feb 17th

OptionAccounts (Position)
CGX 17FEB2017 54 C(-1)
DOL 17FEB2017 94 P(-1)
FTS 17FEB2017 40 P(-1)
HBAN 17FEB2017 13 P(-2)
KO 17FEB2017 44 C(-1)
KO 17FEB2017 40 P(-1)
MDLZ 17FEB2017 39 P(-4)
NKE 17FEB2017 52.5 P(-1)
PEY 17FEB2017 30 C(-1)
PEY 17FEB2017 27 P(-1)
REI.UN 17FEB2017 26 P  Opened in Feb(-1)
SBUX 17FEB2017 52.5 P(-1)
All of these short calls and puts are expiring Feb 17, 2017.  Most of them were opened in January and looks like they will all expire worthless.  I'll be looking to replenish my short puts to collect more premiums.  

February Commentary:

My covered call on $FTS.TO was assigned just before ex-dividend day.  I did not get my dividend.  I wasn't too sad to see this go as I was assigned shares @ $42, my average cost was $41.57 after collecting the premium I sold for Sept 16, 2016.  Even though, I did not make any capital gain from this trade, I did collect $66 from the premiums I sold for short call/put options for Feb 17th expiration date. 

I also made a earnings play on $AMGN and made 5.41% capital gain.

I bought a couple of long puts on $SPY.  They are not working out and will most likely take a loss.

Thursday, February 9, 2017

GILD - Earnings Play Turns Bad

Whenever I try to make a quick buck, it ends up biting me in the arse.  On Tuesday, $GILD was trading in the range of $73 per share.  I sell to open (STO) a put on $GILD just before earnings to collect $46 in premiums with a strike price of $70 expiring Feb 10th.  

OptionAccounts (Position)
GILD 10FEB2017 70 P(-1)
$GILD reported after closing with declining sales and less than optimistic guidance for next year.  Traders hit $GILD hard bringing the stock down 10% in a matter of two days, closing at $65.59 per share on Feb 9th.

What are my options now?
  1. Buy to close (BTC) put to avoid forking over $7000 (assignment) and take a loss of about $397 as of today's market
  2. Take assignment of 100 shares @ $70 and my average would be $69.54/share.  I would sell covered call to bring down my average cost base.
  3. Roll my short put to a further out date to avoid taking a loss and tying up my capital.  BTC put for a loss then STO put to a further out date at the same or lower strike to offset the loss.
I haven't decided what to do yet.  But most likely, I'll either pick option 2 or 3.  I do not like to admit defeat just yet.  When life throws you lemons, just make lemonade!

Update on Feb 10th:
I decided to pick option 3, so I rolled out my short put to March 17, 2017 in hopes that $GILD will recover.  If $GILD is over $70 by March 17th, my put will be worthless.  I'll stand to make +46-354+431= $123 instead of taking the loss and my cash will be left untouched. 

Update on Mar 17th:
The day has finally come!  So how did my $GILD play out?  $GILD closed at $69.06.  I decided to take assignment (average cost $70-$1.23) and most likely sell it on the open market next Monday.  Hopefully, $GILD will hold above this price range and I can make a few bucks!

Saturday, January 21, 2017

Trade Recap for Jan 20, 2016

Interactive Brokers is great in low commissions and no assignment fees but cruel to those traders who do not trade within the minimum cap.  I did not trade for Nov/Dec 2016 and were hit with fees:

2016-12-02Balance of Monthly Minimum Fee for Nov 2016-12.03
2016-12-02US Securities and Futures Value Bundle for Nov 2016-13.44
2016-12-02OPRA (US OPTIONS EXCHANGES) (NP,L1) FOR NOV 2016-2.02
2017-01-04Balance of Monthly Minimum Fee for Dec 2016-12.35
2017-01-04US Securities and Futures Value Bundle for Dec 2016-13.43
2017-01-04OPRA (US OPTIONS EXCHANGES) (NP,L1) FOR DEC 2016-2.01
In order for me to get a credit for those fees:

1)  Trade a minimum of $10USD in commission to eliminate the monthly minimum fee

2)  Trade a minimum of $20USD in commission to eliminate the US options exchange fee

3)  Trade a minimum of $30USD in commission to eliminate the US security and future value bundle fee (I am thinking of discontinuing the subscription for this one and just using Google real time to place my orders if need be)

EMA.TOAdded 100$45.55
FTS.TOAdded 100$41.23
RPI.UNAdded 200$23.57
SRU.UNAdded 100$31.85
TEVAAssigned 100$34.00
PEY.TOAssigned 100$30.00

OptionAccounts (Position)
TEVA 13JAN2017 34 P
BMY 20JAN2017 64.5 C
Got assigned (-1)
KO 20JAN2017 40 P(-1)
PEY 20JAN2017 30 P Got assigned (-1)
WMT 20JAN2017 60 P(-2)

There are many ways to play the options market.  I am mostly a option seller.

By selling naked puts, I am collecting a premium from the start of the day I open the position.  My goal here is to sell out of the money (OTM) below market value to avoid assignment and collect premiums.  If you want to own the stock anyways, this is a great way to get the stock at the price you're willing to pay with additional premium.  

By selling covered calls, I am collecting a premium from the start of day I open the position.  My goal here is to sell out of the money (OTM) above market value to avoid assignment and collect premiums.  If you want to sell the stock anyways, this is a great way to get rid of the stock at the price you're willing to sell with additional premium.

As you can see, two of my puts were assigned as the stock price reached below my strike price.  As a put seller, I am obligated to buy shares if the share price dips below my strike price as did for $TEVA and $PEY.TO.  For $TEVA, I was able to sell my shares for a higher price the next week (Phew, it is currently trading at $33.23 as of Jan 20th, but I still have another put in play that has not expired yet).  For $PEY.TO, I may sell a covered call at a higher price further out date to get a premium.  It is a monthly payer, so I do not mind holding this for a while.

If you do not want to own the stock or sell the stock (do not have the shares which is a naked call), there is another way of avoiding assignment by closing your position for a loss and reopening another position on a further out date for a higher premium to offset your loss.

Sometimes, I like to make bets on the direction of the market by buying PUT on $SPY if I am bearish or by buying CALL on $SPY if I am bullish for the particular time frame.  I will buy puts/calls and if I'm right, I can make money pretty fast if I hit my target strike price and it goes beyond that.  If I'm wrong, well I can lose my bet pretty fast too.  By buying options, I am only losing the premiums I pay for and is very time sensitive.  This by far is risky and you need to be very aware of the market conditions.