Well, we are now starting to get back into a regular rhythm again. All the family drama and travelling is over for now. Thank goodness!! Now I can get back to business!
The DVD for eldest daughter’s Air Force Basic Training Graduation ceremonies came this week. I was gushing just about as much watching that as I was when I was there. Eldest was shown several times in the various segments of the video. Dad also made the video a few times as well. I did a message that anybody could have had recorded, and I was shot by the videographers a couple of times. It was a great trip, but kind of bittersweet as it marked the absolute turning point that my eldest daughter is now officially out on their own.
Youngest daughter’s volleyball team is now 2-1 and showing dramatic improvement with each game. They have a coach who makes the game fun and they are learning the game and getting a great deal of athletic and life lessons already at a young age.
Middle boy is doing well at school for the first week. He is showing some musical talent, and will start piano lessons after the Labor Day holiday.
Ok now on to the trades:
ANALYSIS
AAPL 3 month Price Chart
Here is last week’s trade:
AAPL 650 Put $1.36
AAPL 640 Put $(0.97) This gave an Net Credit of $0.39 for a 7.80% ROI
The increase in AAPL (Apple) price overall went slightly lower for the week. But the drop was very slight on a percentage basis about, 3%, but all of this was in one day – Thursday. This is when our safeties and analytics came into play and made us a safe and profitable trade.
The ROI is 7.8% because we are using a $5 spread which translates to $500 dollars so we double everything to get the $1,000 typical spread valuation.
1. We started looking at the trade Tuesday while the AAPL price was relatively unchanged for the week. The overall trend for the AAPL price is still on the uptrend then so we start looking at the Put side of the trade.
2. The price stayed above the 20 day and 50 day SMA until Thursday. This was another clue to use the Put side.
3. We went out slightly more than 2 Std Dev from the strike price and used our probability to get a 92.3% success probability.
4. The thought was there to convert this into a Condor type trade, but the premium on the call side just wasn’t there.
PAPER TRADE
Again there was no paper trade. I am working on one for next week, but didn’t see anything materialize this week that I wanted to try as an experiment.
COVERED CALLS
We have been doing covered calls on Vivus and McDonald’s. We are continuing with these two stocks in our covered call adventure.
Symbol Company Stock Option Option Initial Annualized
VVUS Vivus 22.90 Sept 25 .27 2,676.00 12.1%
MCD McDonalds 89.54 Sept 92.5 .16 9,174.00 2.09%
VVUS fell below the 50 Day SMA early in the week and fell below the 20 Day SMA later in the week. The price has been flirting with crossing the 20 Day SMA, but has not been able to muster the move. Price went from $21.73 to 21.46 from Monday to Friday. It looks like our covered call is still in good stead to keep our premium safe. There is some concern with the erosion of the stock price from when we got into this trade, but the longer term trend looks good for this stock.
MCD is also has had some light volatility. MCD started the month at $89.57 and ended the month at $89.55, but in between went to $86.99 on the low side and $90.38 on the high side, so this one doesn’t worry us as much as VVUS. Plus MCD is what is known as a World Dividend Dominator. The stock is entrenched in its market and the undisputed leader. Everyday tons of people hit up McDonald’s even if it is just for a coke or iced tea. MCD is making money hands over fist and will continue to do so for the foreseeable future. It grows the dividend each year and has a respectable yield currently just over 3%. Plus in September we will get a dividend for MCD.
Remember, unless we hit a 15% stop loss point we will continue to use these covered call stocks to generate income and not worry about the day to day or month to month price fluctuations. We will concentrate on getting the most premium we can safely from these stocks.
DIVIDEND STOCKS
Here is our Dividend Stock Portfolio:
Ticker Name Recent Price Date Div Yield
KO Coke 38.17 08/27/2012 2.65%
AGD Alpine Global Dynamic Fund 5.76 08/27/2012 12.52%
AOD Alpine Total Dynamic Fund 4.37 08/27/2012 15.10%
MO Altria 34.26 08/27/2012 5.16%
I also should put here MCD even though we have it in our Covered Call Portfolio. McDonald’s fits the bill as it has a definite “moat” around its’ business and puts off a good dividend.
I have developed a watchlist for this Portfolio. These are stocks that basically meet the criteria we have: (1) a moat business model, (2) dividend of at least 3%, (3) solid fundamental analysis numbers. Here is our watchlist:
Ticker Name Recent Price Date Div Yield Target Price
PG Proctor and Gamble 67.19 08/31/2012 3.35% 62.50
JNJ Johnson & Johnson 67.43 08/31/201 3.62% 65.00
INTC Intel 24.83 08/31/2012 3.60% 22.00
I am still working some of the questions submitted. Please be patient and I will get some answers up soon.
DISCLAIMER: Hashley Capital Management, LLC; as well as I are not giving any trading advice. All data is historical in nature and is intended for use as an educational tool. Trading in options is risky and can result in loss of capital. Stocks as well carry inherent risks and should be well researched before any buy decision is made. There is no attempt to sell any brokerage services or act as a broker or dealer by Hashley Capital Management, LLC. Any forward looking comments on this blog are not attempts to solicit business for Hashley Capital Management, LLC and are the opinion of Hashley Capital Management only. If you choose to follow the same path and invest in the strategies and trades used by Hashley Capital Management, LLC after doing your own due diligence, that is your decision and yours alone.
Reach me @:
Twitter: @awagel01
Stocktwits: awagel01
Or leave a comment on the blog
TTFN
Ash
No comments:
Post a Comment