Results for the Week Ending July 15, 2011

Ok, here are the results for the week ending July 15, 2011:

We went all to the NDX Index this week. 

Credit Spreads

None

Iron Condors

NDX     2295-2280 Put

              2400-2410 Call     9.07%

NDX      2295-2280 Put

              2415-2425 Call     5.40%

Weekly Results:

Weekly ROI =      7.23%

Target ROI =       3.50%

Monthly ROI =    16.93%

Working on the analysis part and will have this up by the end of the weekend.  Any detailed questions can be sent to hashleycm@yahoo.com or leave as a comment on this blog and I will reply.

TTFN

Ash

Results for Week Ending July 8, 2011

Ok, here are the results for the just completed week ending July 8, 2011:

Spreads

SPX    1335-1340 Put       .6%
NDX   2350-2325 Put    7.2%

Iron Condor

SPX   1360-1365 Call
           1305-1315 Put    6.1%


The SPX 1335-1340 Put Spread was a last minute trade done in the last 10 minutes of the day with some of my reserve to grab a little extra cash.  For the week we ended up with a 4.39% margin net of commissions.

We still have the VVUS Covered call going on with a week to go.  Currently we will be called away, but that is ok.  By using our strategy of PRICE APPRECIATION + OPTION PREMIUM  we will realize a 5.75% return for the month the covered call will probably be in place.  That equates to a 60+% annualized return without compounding!!!  If we are called away we will look for another covered call to write.  If by chance the market price falls below the strike and we are not called away we will sell more options on our 300 shares of VVUS.

Any questions can be left as a comment below or directed to hashleycm@yahoo.com .

TTFN

Ash

Ok yall, I promised these a while ago and here they are.  This is my list of trading rules.  This is a dynamic list and changes from time to time. Periodically I will repost this with changes if any.  If there is a major change then I will alert you.  But I think there will not be many of those. 

If  you want to leave any comments, great.  Or you can email or Twitter me as well.

I am looking to put a little more analysis of the trades I do.  Now that you have my rules you can see some rhyme to my reason

TRADING RULES

1.       I trade weekly options almost exclusively. 

2.       Rarely I will trade covered calls, with a minimum 4.5% monthly profit target

3.       My weekly profit margin target is 3.5% floor

4.       Use mainly credit spreads, but RARELY Iron Condors, Calendar, or Diagonals

5.       I trade almost exclusively credit spreads on the SPX, NDX, SPY indices

a.      Some trading is done on ETF/Ns – GLD, SLV

b.      Selected trading on stocks with weeklies, these vary with the week, but mostly GOOG, PCLN, AMZN, NFLX,

c.       I try to limit the number of items to trade in,  this limits the amount of information I need to keep up with on a daily basis.

6.       Weeklies tend to follow more technical analysis than fundamental analysis. 

7.       News items tend to effect weeklies more than their monthly counterparts

8.       Each week is a new week.  Research must be done each week.

9.       I tend to trade in blocks of 5 to help manage risk

10.   I tend to make trades Wednesday noonish also to manage risk

11.   I keep a $5-7K reserve in case I need to make a late adjustment

12.   Trades are at least 1 Std Deviation out from the strike price

13.   Keep discipline

14.   Use your experience to modify, add change, delete rules as needed

15.   Keep a log of your trades and analyze all trades to see what went RIGHT as well as what went WRONG

16.   Be honest with yourself.  A great looking spreadsheet to show off is worthless if it has false info in it

17.   The only way to trade successfully is to constantly learn and refine your strategies.  My strategy works for me as I am comfortable with it.  You have to be comfortable with the strategies you use and ones you want to try.

These are my rules.  Use them as you wish.  This is my trading system and is you want help with any part of it drop a line or tweet and I will help you. 

@awagel01 for Twitter

hashleycm@yahoo.com for email

Michele Bachmann & her Presidential Aspirations

OK, most of the time I do finance related things here, but when I read and watched some of the stuff this woman put out today in her first day on the campaign trail I about puked. AND I AM A REGISTERED REPUBLICAN !!!! I have worked in local and regional politics for close to 25 years as a "labor of love". Now I will admit I am a fiscally conservative, socially middle of the road to liberal Republican with a fair amount of Libertarian tendencies.

Ms. Bachmann made the morning news circuit and here are a few of the gems she put out:

"This is the Obama debt, this is the Obama deficit, and this is the very poor working Obama economy." This was on the CBS Early Show. The Obama debt - yes for the past two years, The Obama Deficit - he contributed the past two years, BUT G.W. Bush took us from a surplus to a deficit with his adventures in Iraq & Afghanistan, and a huge prescription drug benefit to seniors while at the same time slashing tax revenues. And despite what the supply siders say, (and I learned from the best supply siders - David Stockman the author is the Reagan Era reincarnation of this idea is a family friend and fellow West Michigan ex-pat) in the medium to long term lower tax rates do not create more jobs - the economic stimulation comes from the benefactors of the tax cuts reinvest their capital in more personal assets such as stocks, bonds, real estate and the like.

Repealing the federal minimum wage is another idea Ms. Bachmann put out on CBS and also on ABC's Good Morning America. This would increase job growth and lower the unemployment rate so low as to "potentially wipe out unemployment". As I said above I have some large Libertarian stripes, but there is a reason there is a federal minimum wage = employers were not providing a wage for certain jobs that a person could live on. Try living on the federal minimum wage. It can be done, but you will not get rich doing it. In fact you will barely get by - which is exactly what the federal wage program was designed to do. Getting rid of the minimum wage laws will not wipe unemployment as we know it. Marginally it might provide a slight dip in unemployment, but the larger issue is that jobs that fall under the minimum wage law will have a lower wage rate which will improve the profit margins of the companies, but will do little/nothing for the workers that have those jobs. In fact the CBO (Congressional Budget Office and the GAO - General Accounting Office state that overall economic activity will be lowered because the low wage people who will be losing $$ in the pocket tend to spend creating the multiplier while the benefactors - the owners of the companies tend to save, effectively taking the money out of the economy. So the action that Ms. Bachmann says will "potentially wipeout" unemployment will most likely have little if any effect on unemployment and actually harm the larger economy.

I am sure that Ms. Bachmann is some intelligence. She is a tax lawyer after all. But her economic ideas not only misinformed they are actually wrong and will do much more harm than good.

OK any replies are welcome.

Still working on putting the trading rules into a readable form.

TTFN

Ash

Apology for Below Post

As you may have noticed - some of the formatting didn't come through. I have tried all I can - following the directions that Blogger puts out and it still hasn't worked. So sorry for the formatting issues. Hopefully you can glean some good info out of it.

I will be asking others that know this blogging stuff way better than I do to see what I can do to so these formatting issues don't get in the way of the info.

Ash

Trades for Week of 06 24 2011

Ok, here are last week’s results. Overall we did marginal coming in at a +2.52% for the week. But the larger thing that happened this week – this was a textbook week for being disciplined and following your trading rules. By following my personal trading rules (which I will be putting up this week after condensing them from many past posts on other blog sites) and staying disciplined (using the sports cliché – I stayed within myself) I turned a negative week into a positive week. 7 of 8 trades were successful, 87.5% winning percentage. I will take that any day. This game is all about managing risk. As a finance guy I like to get as close to a sure thing as I can get, and 87.5% is close to that. For the month we are at a 18 for 19 pace on winning trades = 94.7% success rate.

All was looking good until the Greek news last week hit. The lack of confidence the Greeks introduced into the system by just shuffling ministers instead of letting a few heads roll gave a late week shock to all indices. I was ok in all trades except the GLD 147-149 Credit Spread. By the time my alert got to me I was seriously in the red. By the time I was able to get a trade together my entire positive position for the week was wiped out. I will be honest – this is the first time I have been off by this bad an amount. I have had losing trades before, but not to this degree. But I had a reserve of cash I keep on hand all the time for just this type of emergency. I noticed that the SPX on both the Call and Put side were giving great premium all Friday. I placed my trade just at the end of the trading day Friday and was able to take advantage of the good premium to bring me back into a positive cash flow for the week. A secondary point here, early Friday if I had placed a trade I was looking at early in the day Friday I would have made a KILLING!!! BUT that is not my Friday Trading rule. The situation could have easily turned on me. My Friday Trading Rule = place any trades late in the trading day to minimize risk. I have this rule in place for a reason – learned the hard way. Looong story short = Followed my rules and all came away ok for the week.

Trades for Week of June 24

Call Spreads

Stock Strikes Call/Put %Profit $Amt / Contract
NDX 2275-2300 Call 4.20% $105.00
SPX 1310-1320 Call 5.83% $ 58.33
GLD 147-149 Put 6.00% $ 12.00
SPX 1315-1310 Call 4.60% $ 23.00
GLD 147-149 Put -51.00% $102.00-
SPX 1280-1275 Call 16.60% $ 83.00
SPX 1275-1270 Call 7.67% $ 76.67

Weekly Net Profit% = 2.52%
Weekly Target% = 3.00%
June Profit % = 10.28%

Takeaways from this past week:
1. Have Trading Rules
a. I know indices and the ETF/Ns used on them. That is what I used here
b. Diversify along product and strike
c. Put on trades in manageable lots
d. Keep a reserve in case things go wrong
e. Do your homework, but be prepared for unforeseen things ie GREECE!!
2. Follow Them
3. Stay Disciplined
a. The market will tempt you to make quick, rash decisions…DON’T DO IT!!!!!
b. Be confident in your decision making. If you have a good system you will be ok until
you hit your stops.
4. When Things Go Wrong, use Your Trading Rules to Look for Opportunities to Get Back on
Track

Look for my complete trading rules soon.

TTFN

Ash

Hey there,

After the past couple of weeks of travelling, graduations, family stuff and just miscellaneous life goingson I am back.

A little catchup required:

Week of June 10 Trades:

SPX June 10 1260-1270 Put Credit Spread 3.37% Profit
SPX June 10 1255-1265 Put Credit Spread 1.83% Profit
NFLX June 10 270-275 Call Credit Spread 1.50% Profit

Weekly Net Profit 2.21%
Weekly Target = 3.00%
June Profit % = 4.55%

Results a little down this week due to the heavy graduation and other family party schedule. Trades are usually done on Wednesdays, but these were done Thursday noonish. But we are still up for the month and well on our way to the goal of 10% gain for June

Week of June 17 Trades:

GLD 145-147 Put Credit Spread 3.60%
SPX 1285-1295 Call Credit Spread 5.21%
NDX 2250-2260 Call Credit Spread 4.93%

Weekly Net Profit = 4.93%
Weekly Target = 3.00%
June Profit% = 8.69%

Results are a little higher than usual for the week which helps make up for last weeks underperformance. Closing in o.n the 10% target for June.

Not included in these results is the VVUS covered call position taken:

Covered Call

Bought 300 shares of VVUS @$7.85
Sold 3 July $8 Calls @$42

The Transaction so far:
300 x 7.85 = $2,355.00 Cost of VVUS Shares
1 x 7.95 = $ 7.95 Commission
3 x 41 = $123

Profit potential here is as follows:
$2,400 Shares called away @ $8.00 x 300
$ 123 Revenue from Call Premium
Total = $2,523

Costs = $2,362.95 - Cost of shares and commission

Profit = $2,523-$2,363 = $160; 160/2363 = 6.77%

If $8 strike is not reached then we will roll this over and go out another month. 6.77% per month is a decent enough return to continue this process (6.77 for 12 months = 81.24% not too bad!!).

I am a little more timely on Twitter so if you want follow me @ awagel01 on Twitter.

Any questions or comments please post then and I will answer them. Hopefully on a timely basis.

Till l8r my friends,
Ash