When it gets close to the "Breakeven Point" I am ready to bail out. Right now I have a cushion to be able to take a little loss. I bailed out last month when it got to that point, only to have it reverse back to what would have been profitable by exp. The increase in contracts will only be played, if the market looks some-what stable...and this month is profitable. I'll re-visit that when I am ready to do this again in Oct. BTW...GOOG is up $6.41 so far today.
I have done some covered calls, along with buying calls and puts. The buying of calls and puts had it's ups and downs. Figured it would be better if I was the one selling the options, instead of buying them. I just looked at all the options that I had in the past that expired worthless. Nice to be on the "Other side" of the option deals. On Covered Calls, I mainly look for one that I could use a LEAP to back deal, instead of the out-right stock purchace. This give me more leverage to sell a couple more calls with the same cash outlay for the long side.
Nice run on GOOG the past couple days... I bailed out of my short 370 put a few minutes ago. Originally sold it for 2.80 x 10 contracts. Bought it back for a dime, plus commission. I will just let the Long 360 expire this Friday...not worth doing any thing with it so I will write it off. (save another commission). Net increase $1555.03 Total acct size now....$14,085. Going to keep any eye on GOOG to see if it tops out near 410- 415 area.
Another Month to start up again. This month I will be splitting into 2 diferent plays. First will be GOOG again. It has had a substantial increase for the past week or so, but I do not see it goin too much higher. Second SPX. This will be a new one for me to work with. I also do not believe that the growth can continue into October. Acct Bal as of 9/18/2006..$14,085. STO 5 GOOG 460 c @ 3.0 ($1500 credit). BTO 5 GOOG 470 c @ 2.0 ($1000 debit). Minus $29.98 comm. STO 5 SPX 1360 C @ 2.85 ($1425 Credit). BTO 5 SPX 1370 C @ 1.5 ($750 Debit) Minus another $20.98 comm.
GOOG just took a big plunge.... My 460 call I sold dropped significantly so I took it off the table and took the profit. I will leave the 470 in place incase GOOG snaps back so I can sell the 460 again. Sold Oct 460 c @ 3.0. X5 yesterday. BTC Oct 460c @ 1.5. X5 today. That is $785 after commission profit. The SPX also is in a fall this morning. I did a BTC on the SPX 1360 call for 1.85 x 5 Going to leave the 1370 up for now, same as the GOOG 470. Taking off the table another $485 after commission. $1,270 in one day, and still have my protection calls in place if I need them later on.
Update... SPX Spread in-play again. Sold a 1360 Call again to go with the 1370 call I bought a couple days ago. 5 Options @ 3.0 ($1500 Credit). Minus $14.99 commision. GOOG will have to move quite a bit before I will open that one back up again.... Acct balance as of this morning before the trade $15,325.
Hi Jlim, would you mind sharing your thoughts on how do you select the stocks and then how do you select the strike? Cheers