I am a Race Car Fabricator, and I live in Auckland, New Zealand. I have a been regular visitor here at ET for over two years now. I have been trading and investing for over 6 years now (stocks and options) over that time I have developed and refined my strategies for making money. My core strategy is covered calls, on ETF's ( I used to use stocks, but the way the market has been this year, I have gone for the safer option of ETF's). In this journal I will document my trades, and try to answer any questions that I feel will benefit this journal. Please if you feel the need to make stupid comments, please do it elsewhere, I have gained a lot of good advice from this forum, and would like to give something back. At The beginning of October, I set up a $200k account and my goal is to make between 2% and 3% return per month from my account. Okay time to get started.
The ETF's that I am interested in buying are the, QQQQ, XLE, SMH, DIA, and IWN. On October 6th 2008, I purchased, 800 QQQQ @ $33.64 600 XLE @ $53.07 1000 SMH @ $21.89 300 DIA @ $97.55 600 IWN @ $57.70 for a total investment of $144,603.75 I also sold 3 contracts of .DAVJT (DIA OCT 98 Call) for $4.05 and 6 contracts of .IWNJJ (IWN OCT 62 Call) for $0.95 for a total premium income of $1755.08
7th October 2008 Today I sold, 8 contracts of .QQQJL (QQQQ OCT 38 Call) for $0.40 10 contracts of .SMHJP (SMH OCT 24 Call) for $0.38 6 contracts of .XBTJI (XLE OCT 61 Call) for $1.56 for a total premium income of $1591.07
10th October 2008 The Market was down for the 8th day in a row. My account like most peoples had taken a bit of a battering, so I decided to make some position adjustments. I bought another, 300 XLE @ $39.61 (a cost basis of $48.58) 200 QQQQ @ $30.02 ( a cost basis of $32.92) 200 IWN @ $47.10 (a cost basis of $55.05) 200 DIA @ $81.58 ( a cost basis of $91.16) for a total investment of $43,682.80. I also bought back all my option contracts as they had lost a large amount of their value. I then sold 5 contracts of .DAVJM (DIA OCT 91 Call) for $1.42 9 contracts of .XLEJT (XLE OCT 46 Call) for $1.27 8 contracts of .ITVJA (IWN OCT 53 Call) for $0.90 10 contracts of .QAVJG (QQQQ OCT 33 Call) for $1.12 10 contracts of .SMHJJ (SMH OCT 24 Call) for $0.62 For a total net premium income of $3434.30
17th October 2008 October expiration day My .XLEJT 46 calls were looking like being called out, so just before the close I bought them back for a $0.24 profit and then sold 9 contracts of .XBTKA (XLE NOV 53 Call) for $2.47 The rest of the option contracts expired worthless My account balance (at time of writing is) $195,361.98 with a cash amount of $19,759.98 The nett premiums received were $5838.50 representing a return of 2.9% for the month.
In My account I try to keep between 10% and 30% in cash, allowing me to adjust my positions when the need arises. (at the moment I need to exit a postion to get the cash balance up a bit more) When a position drops by more than 15%, I look to try and add to the position, even if it is only 200 shares. I know that averaging down is considered a sure fire way to the poor house. But what this does is enable me to buy back my sold call for a profit, and then sell the next strike price down from the one that I bought back. That way the stock doesn't have to move up so much, allowing me to exit the trade profitably.
21 October 2008 Today I sold 5 contracts of .DAVLS (DIA Nov 97 Call) for $2.34 8 contracts of .ITVEW (IWN May 2009 49 Call) for $7.50 10 contracts of .QAVFB (QQQQ Jun 2009 28 Call) for $6.40 For a total premium income of $13,510.05
The nett premiums received were $5838.50 representing a return of 2.9% for the month. ________________________________ You did post the realize gain, but what about your unrealized loss? I am not trying to be critical so maybe you can fill in all the blanks. Maybe I missed something or did not look at everything in a proper perspective.