Finance, Food, Fun & Other Stuff

Monday, January 14, 2013

Results for forst trades of 2013

Hey All,

Ok - I tried to put up my images that I saved to my computer, but apparently during the past week the fine folks at Google have decided to make it that I have to upload my images to Picassa. I can no longer grab saved images on my own computer. Soooo....I am posting the text version now and will add a Picassa account so I can continue to put the graphs in the blog. NOT HAPPY GOOGLE!!!!

Well, now I am back at it after taking a couple of weeks off to enjoy the holidays and also not finding any trades with all the volatility surrounding the fiscal cliff. We go back to an old fave – GLD. Also we hot up a new trade partner – NFLX (Netflix).

Now on to the analysis:

ANALYSIS

GLD

GLD 162 Call $ 0.15

GLD 163 Call $(0.09) This gave a $0.06 Credit for a 6.00% ROI

NFLX 92.50 Put $ 0.22

NFLX 87.50 Put $(0.10) This gave a $0.12 Credit for a 2.40% ROI

Ok, let us hit the GLD trade first. On Friday the 4^th we got our new indicator as a signal to trade this ETF. The price broke the lower Bollinger band then came back. This gave us the clue to go through the rest of the analysis and see if this would be a viable trade.

1. The Bollinger Band test was met

2. Price action was trending down so we look to the call side. (There was a possibility of a condor trade here, but I just didn’t do it)

3. We found a call spread with a minimum 85% probability of success. This trade had a 90.01% probability of success.

4. We were more than 1 Standard Deviation away from the underlying price at the time of the trade.

5. We were able to get more than the 3.00% ROI

Now looking at the chart you can see that the price moved into our spread on Thursday. This did cause some consternation, but this was due to a spike in response to some momentary rumor news. As you can also see the price started to retreat back into our profitable zone Thursday afternoon and kept well below our spread all Friday. The spike lasted less than a trading day after some nimrods in our Congress spouted off again on letting the country go into default over the debt ceiling. When the hysteria ebbed so did the price.

Now on to NFLX. This is a stock I have been watching for several weeks. NFLX has been on a long term up trend. Using some Fibonacci retracements and statistical means analysis I have calculated that this up trend will peak at around $110 for this stock. I put this trade on to take advantage of this info.

1. The long term trend is up so we look to go to the put side.

2. The Bollinger Band test was not met last Friday.

3. This spread had a 94% probability of success.

4. We were right at 1.5 Standard Deviations away from the underlying at the time of the trade.

5. We did not get the minimum 3.00% ROI, but I waived that mainly because this was the first time I was trying this stock and I just wanted to be profitable. In future trades with the stock I will enforce the 3.00% minimum.

PAPER TRADE

No paper trades this week

COVERED CALLS

We still have our covered calls on Vivus. And I have added another to the mix this week. Chicago Bridge and Iron (NYSE: CBI). This stock is seeing an up trend toward its 52 week high of $47.77. The stock closed $44.70 on Friday and has been rising for most of the month. So we go with the January 48 Call.

Symbol Company Stock Option Premium Initial Annualized

VVUS Vivus 13.89 Jan17 .32 2,676.00 14.35%

CBI Chicago Bridge & Iron 47.30 Jan48 .50 4,480.00 13.39%

VVUS – This looks good with a week to go. We should be safe. VVUS is now on an uptrend after the massive drop in response to VVUs not being first to market with a Hepatitis C drug. Remember this is a speculative play and has always generated good revenue for us. I will continue to generate cash with this and ride out the temporary dip.

CBI – This stock has a distinct possibility that we will be called away. The stock is flirting with the 52 week high. So far it has not breached the high, but is inching closer every day. Like we said last time, if we are called away we will make money since we bought CBI below the strike price. And if the flirtation comes close but does not go over our strike, then we also make good money. This is a true win-win situation. This is the type of situation that covered call sellers live for.

When these options expire and I get into new ones I will start giving monthly and year to date returns on the covered calls. This is in response to many of you asking for this data. I do not have this data readily available for the current covered calls, but will have it going forward.

DIVIDEND STOCKS

Here are the two portfolios updated:

Ticker Name Buy Current Date Div

Price Price Yield

KO Coke 38.17 36.95 08/27/2012 2.71%

AGD Alpine Global Dynamic 5.76 5.46 08/27/2012 12.18%

AOD Alpine Total Dynamic 4.37 4.20 08/27/2012 14.80%

MO Altria 34.26 32.98 08/27/2012 5.17%

INTC Intel 22.87 21.98 10/01/2012 3.94%

HIX Western Asset Hi Inc II 10.53 10.08 10/15/2012 9.44%

MCD McDonald’s 91.74 91.76 10/30/2012 3.55%

MSFT Microsoft 28.55 26.90 10/30/2012 3.12%

JNJ Johnson and Johnson 68.03 72.60 11/23/2012 3.53%

PG Proctor and Gamble 68.72 69.31 12/21/2012 3.27%

Current Prices as of 12/31/2012 Closing Price

The GOP not being able to bring to a vote their “Plan B” for the fiscal cliff resolution brought the market down to end the week, and basically kept us from getting back to even price wise in many of our portfolio holdings. In the initial portfolio we do not reinvest dividends, treat it as an income generator. The new portfolio will start with the same dollar amount invested in each stock and will reinvest the dividends. The return of the second portfolio will differ since we will not have equal weighting and will reinvest the dividends so the monthly payers will grow a little faster than the quarterly payers. AGD, AOD and HIX are Closed End Funds that pay monthly dividends.

Both portfolios will carry a 15% stop on them. Portfolio #1 has 100 shares of each stock and will generate $1,254 in dividend revenue assuming no reinvestment. This gives a 4.12% return. Portfolio #2 will have $5,000 invested into each stock and there will be dividend reinvestment. I will carry shares out 3 decimal places. So here is how Portfolio #2 shakes out:

Ticker Name Buy Current Ex-Div.

Price Price Date Shares

KO Coke 36.89 36.95 02/27/2013 135.917

AGD Alpine Global Dynamic 5.76 5.46 01/22/2013 970

AOD Alpine Total Dynamic 4.37 4.20 01/22/2013 1,240

MO Altria 34.26 32.98 12/21/2012 148.894

INTC Intel 22.87 21.98 02/05/2013 240

HIX Western Asset Hi Inc II 10.53 10.08 01/16/2013 519

MCD McDonald’s 91.74 91.76 02/28/2013 55

MSFT Microsoft 28.55 26.90 02/19/2013 182

JNJ Johnson and Johnson 68.03 72.60 02/25/2013 71

PG Proctor and Gamble 68.72 69.31 01/17/2013 72

Buy Price Portfolio Value = $51,996.01

Current Price Portfolio Value = $51,031.10

Dividends Received So Far = $114.11

Usually there is a watch list portion for the Dividend portfolio. But I have put all the watch list stocks into the portfolio. Now I am looking for replacement stocks for underperformers in the portfolio. But this will not be an easy task. Our three keys make getting on the list and then getting into the portfolio rather difficult. Here are the three keys: (1) a moat business model, (2) dividend of at least 3%, (3) solid fundamental analysis numbers.

Ticker Recent Date Div Target

Name Price Yield Price

QUESTIONS

No questions this week.

I did receive some questions over the holiday and I am working on the responses. Keep the questions and comments coming. I really enjoy reading them. If you have any ideas for what you want to see in future issues or topics you would like for me to discuss please send that as well.

As we start 2013 I want to try and make this a better blog and as informative as possible. Also you lurkers – sign up !!!! It doesn’t cost you anything; I don’t sell any info to anybody so sign up!

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 stocks and/or options is risky and can result in loss of capital. Stocks and options carry inherent risks and should be well researched before any buy/sell 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 @:

Email: hashleycm@yahoo.com

Twitter: @awagel01

Stocktwits: awagel01

Or leave a comment on the blog

TTFN

Ash

Tuesday, January 1, 2013

Talking about Christmas Week 2012

Hey All,

This week there was not a trade put on. The fiscal cliff worries weighed heavily on the market. I just could not get my indicators to line up for a trade. There were some trades that I thought would have made money, and in hindsight many of them would have made money. BUT our system is not built on hunches and random thoughts. The system works because the indicators give us a rationale behind the trade. This past week I just could not get any to line up.

I did do some paper trading with some trades that are called pinning trades. We will talk about them in the paper trade system.

Now on to the analysis:

ANALYSIS

NO ACTUAL TRADES THIS WEEK

PAPER TRADE

AAPL 495 Put $0.53

AAPL 490 Put $(.22) This gave a $0.31 Credit for a 6.2% ROI

1. This trade is called a pinning trade. I am still researching the name as to why it is called pinning, but basically I made this trade with about 30 seconds left in the trading day Friday.

2. The shortened week with the holiday combined with all the fiscal cliff mess in the air gave us no real opportunity to place an actual trade, so I decided to try a new strategy in the paper trading section.

3. The volatility was extremely high Friday and prices were bouncing all over the place as each new rumor of progress or regress hit the wires. The end of the day saw a sharp decline as CNBC reported that there was no progress on a deal and all were done for the day on Friday.

4. This caused a last minute price spike downward. Earlier in the day I had looked at the AAPL 490/495 Put spread for an actual trade, but the premium wasn’t there. Finally at the end of the day it was and we put it on as a paper trade.

5. I did not have the time to do the analysis again on this trade since the end of the trading day was literally seconds away. That is why I did it as a paper trade. I knew from experience and a good hunch that the trade would be profitable. But before I do a real trade I want all the analytic work done and confirming the trade.

COVERED CALLS

Symbol Company Stock Option Premium Initial Annualized

VVUS Vivus 13.21 Jan17 .32 2,676.00 14.35%

CBI Chicago Bridge & Iron 46.35 Jan48 .50 4,480.00 13.39%

VVUS – We claimed our premium last week and have written (sold) the January 17 Call going forward.

CBI – This is the first time we put this trade on. CBI has grown tremendously this past year and I wish I would have added it to my portfolio months ago. But it is still a good stock for covered call writing. This stock has a good chance of breaking into a new 52 week high. If it does and hits 48 then we will make $165 + $50 = $215 for a 4.79% return in the month. If we only get the option premium then we will get 1.11% for 3 weeks. Not a bad return at all either way.

Starting in January I will expand this part of the blog to show our monthly and annualized return in a chart. This is in response to those who have issues with me adjusting the annualized return each month when I enter a new option. I will continue to do this as this is the industry standard. But I am adding the additional work to show the actual return and a running return for the year. This will refine the analysis so those who like the covered call aspect can see how the return would look throughout the course of the year.

DIVIDEND STOCKS

As I said last week I would be updating this part of the blog. I am keeping the initial dividend portfolio. This portfolio purchased 100 shares or each stock. This time we created a new portfolio with the same stocks, but allocating $Here is our Dividend Stock Portfolio:

Ticker Name Buy Current Date Div

Price Price Yield

KO Coke 38.17 36.25 08/27/2012 2.71%

AGD Alpine Global Dynamic 5.76 5.23 08/27/2012 12.18%

AOD Alpine Total Dynamic 4.37 4.03 08/27/2012 14.80%

MO Altria 34.26 31.44 08/27/2012 5.17%

INTC Intel 22.87 20.62 10/01/2012 3.94%

HIX Western Asset Hi Inc II 10.53 9.66 10/15/2012 9.44%

MCD McDonald’s 91.74 88.21 10/30/2012 3.55%

MSFT Microsoft 28.55 26.71 10/30/2012 3.12%

JNJ Johnson and Johnson 68.03 70.10 11/23/2012 3.53%

PG Proctor and Gamble 68.72 67.89 12/21/2012 3.27%

Current Prices as of 12/31/2012 Closing Price

Ticker Name Buy Current Ex-Div.

Price Price Date Shares

KO Coke 36.89 36.25 02/27/2013 135.917

AGD Alpine Global Dynamic 5.76 5.23 01/22/2013 970

AOD Alpine Total Dynamic 4.37 4.03 01/22/2013 1,240

MO Altria 34.26 31.44 12/21/2012 147

INTC Intel 22.87 20.62 02/05/2013 240

HIX Western Asset Hi Inc II 10.53 9.66 01/16/2013 519

MCD McDonald’s 91.74 88.21 02/28/2013 55

MSFT Microsoft 28.55 26.71 02/19/2013 182

JNJ Johnson and Johnson 68.03 70.10 02/25/2013 71

PG Proctor and Gamble 68.72 67.89 01/17/2013 72

MO - Dividend to be paid 01/10/2013

Ticker Recent Date Div Target

Name Price Yield Price

QUESTIONS

No questions this week.

Happy New Year to all!! Next week is another short week with the holiday. Trade safe and safe travels if you are going to be with family over the holiday.

Reach me @:

Email: hashleycm@yahoo.com

Twitter: @awagel01

Stocktwits: awagel01

Or leave a comment on the blog

TTFN

Ash

Monday, December 17, 2012

Results for Week Ending December 14, 2012

Hey Fellow Traders,

This week we go back to a stock we haven’t used much recently – Priceline.com (PCLN). For quite a period of time the premium just hasn’t been there with PCLN. Other items on our list, particularly GLD and AAPL lately have been where the premium has been. This week GLD was still there for premium, but I just couldn’t get the signals to make the buy (there were some signals that I didn’t see until Thursday evening – more on this later). AAPL has lost much of its’ premium luster with the dramatic drop in price.

MAX10 update! – Last week was week 10, the last week. The classes were tough, but now instead of being totally gassed like I was during the first round, I am now just a little winded. This time around I really didn’t lose any inches, but my endurance has gone way up, my legs are getting stronger – I can actually run a few laps around the track again. Thanks to my arthritis I had been relegated to the elliptical for years. I did hit a new personal record of 72 pushups in a minute and came close to my situp record. I am taking the next week off from MAX10 to let the body recharge. I have my body fat analysis next week, I am hoping to be at 20% or less.

We are in the midst of lots of kid Christmas programs and friend’s programs. Lots of great music and holiday cheer. Eldest daughter is doing well, the USAF is doing well and she is blossoming into a fine young woman. Boy is doing well and youngest girl is happy the Christmas is almost here. We have a short week coming up before the holiday with the kids in school then off to the holiday fun!!!

Now on to the analysis:

ANALYSIS

Here is the trade:

PCLN 630 Call $0.68

PCLN 635 Call ($0.35) This gave a $0.33 Net Credit for a 6.8% ROI

Total ROI for the week = 4.25% because we used $500 spreads so we double the spread ROI to get our total ROI.

Let us go through our process to see how we arrived at the call spread.

1. For the past two weeks the overall price trend for PCLNT has been down so we are looking call spread.

2. Among the eligible trades on our list of approved stocks/indexes/ETFs PCLN, AAPL, and GLD were the only ones that had ROI that were acceptable.

3. GLD looked good, but couldn’t get current signals to go our way. AAPL has lost its premium mojo with the recent dramatic price decline. That left PCLN.

4. Now moving up the Call side of the option chain we arrive at the 630/635 trade when we got

a. 92.3% probability of success

b. 6.6% Net ROI

5. The brown lines show the trade.

6. The circles show a new signal that we are looking at incorporating into the model. The circles show where the price hit the upper Bollinger Band then retreated downward. I am working on a full treatment of this mid-week.

PAPER TRADE

No Paper Trades this week.

COVERED CALLS

We still have our covered calls on Vivus.

Symbol Company Stock Option Premium Initial Annualized

VVUS Vivus 11.48 Dec13 .26 2,676.00 11.65%*

* Changed this calculation from using the stock price at call option sell to using the initial investment.

VVUS – We are riding the downward side of this speculation play. We are making ok money each month, but we need to eventually get back some of the initial outlay. When VVUS rebounds on its next drug announcement we will probably look to sell out.

DIVIDEND STOCKS

Here is our Dividend Stock Portfolio:

Ticker Name Buy Current Date Div

Price Price Yield

KO Coke 38.17 37.66 08/27/2012 2.71%

AGD Alpine Global Dynamic 5.76 5.22 08/27/2012 12.18%

AOD Alpine Total Dynamic 4.37 4.07 08/27/2012 14.80%

MO Altria 34.26 33.16 08/27/2012 5.17%

INTC Intel 22.87 20.53 10/01/2012 3.94%

HIX Western Asset Hi Inc II 10.53 9.80 10/15/2012 9.44%

MCD McDonald’s 91.74 88.88 10/30/2012 3.55%

MSFT Microsoft 28.55 26.81 10/30/2012 3.12%

JNJ Johnson and Johnson 68.03 70.69 11/23/2012 3.53%

Current Prices as of 12/14/2012 Closing Price

The portfolio is still down as the overall market drop after the Presidential election. We are starting to sound like a broken record as this is this lower price will give us a dividend reinvestment opportunity at lower prices. AGD, AOD and HIX are Closed End Funds that pay monthly dividends. With dividend reinvestment this means that these positions will increase and I will be able to get more shares with the depressed prices. If you are not reinvesting dividends then you are still accumulating cash to buy the next batch of stock at the rate you signed on for so you should be happy as well. Or you can now buy more stock with the dividends already accumulated. This is a good case all around.

Each of these stocks carries a 15% stop on them, and we are nowhere near that on any of these stocks. If 100 shares in each stock is held that will generate $1,254 in dividend revenue assuming no reinvestment. This gives a 4.12% return. This is a pretty good return in this market and it is very safe. This portfolio is made up exclusively with Blue Chips and Closed End Funds that are diversified in sectors and globally. If reinvestment is used that number goes even higher.

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 Recent Date Div Target

Name Price Yield Price

PG Proctor and Gamble 69.93 09/21/2012 3.27% 66.00

PG – Buying on the next dip below $66

QUESTIONS

Where have you been the past couple of weeks? I REALLY missed your analysis and tracking of options and dividend portfolio.

First, I must apologize for my absence. I wish I could say it was some noble thing like saving a village in Africa or donating a organ to save someone. But it is much more mundane. I had some family issues that took me away from this blog. Hopefully all that is behind me now and I can get back to a more regular rhythm in these blob posts. My goal is to have this be a weekly and sometimes more posting. The New Year is coming up and that is one of my resolutions.

Why do you stick with VVUS? This is dragging down your overall performance a lot! I understand that sometimes you want a speculation play, but this seems to be a dog. What gives?

Good question. I am sticking with VVUS primarily because a look at the long term chart shows lots of ups and downs in this stock. Right now we are in a down trough. But we will be getting into a up trend soon enough. AS we ride that down trend out we are getting good option premium. Now of course I could be wrong on this and VVUS could never have another drug out there again, but I doubt it. They are in end stage trials on several drugs and the drugs they do have out are gaining acceptance. If you are a little more faint of heart then a stock like Celgene (CELG) or Gilead Sciences (GILD) would be a good fit. Both are fast growing and still a little on the speculative side. If you are a fan of Jim Cramer he is a big GILD fan.

Do you use the covered call strategy on your Dividend Portfolio? It seems this would be a great way to boost the revenue and returns on this portfolio?

I am seriously thinking about using the covered call strategy on part or all of the Dividend Portfolio. Right now the main inhibitor is cost as we have 100 shares (called round lots) of each stock. This amounts to 1 option contract. So for each stock we would have only one option contract available. That is what drives the cost into being prohibitive. As we accumulate shares and can do more than one contract then the covered call strategy would fall into line cost wise. I am working on getting a dividend portfolio that is dollar weighted – meaning that we will spend approximately the same amount of money on each stock instead of having the same amount of shares. The option premium is low right now as we as a nation await the resolution to the fiscal cliff. So currently there are no options that meet our criteria on a monthly basis for the Dividend Portfolio.

Reach me @:

Email: hashleycm@yahoo.com

Twitter: @awagel01

Stocktwits: awagel01

Or leave a comment on the blog

TTFN

Ash