#pietrade conversion to #fuzzy Sold…

#pietrade conversion to #fuzzy

Sold WDC for 67.16 against cost basis of 72.34. BTO 60 leap in 2020 for 14.15 bringing new cost basis to 19.33. With 73 weeks left only need to collect 0.27 per week to cover. Already short the 70s 16 DTE.

Freed up 60k in margin for other uses.

I will be doing this a lot more with #pietrades that go way ITM. Much cheaper way to stay in the trade, less to lose, less to make up and plenty of time to do it.

Question for @fuzzballl since you do the most of these. On an annualized basis what are realistic returns for these? I personally come close to 100% but may not be managing them the best.

#fuzzies

#pietrades and #fuzzies MU 2020…

#pietrades and #fuzzies

MU 2020 55/55 calendar rolled out to 15 DTE and down to 53.5 for 0.71 credit. Cost basis now 12.62

WDC assigned on 7 contracts 75 puts at 73.71 cost basis. I am sure the other 3 will assign so sold 10, 8 DTE 69.5 cc at 0.93 dropping cost basis to 72.78.

I can see both of these are reversing already so will end up adjusting.

TQQQ 60 cc rolled out to next week for 0.9 credit. Cost basis now 57.79 batch 1

TQQQ 59 CC rolled to next week for 0.7 credit. Cb now 57.25 batch 2

AMAT 47 cc rolled out next week for 0.41 credit. cb now 49.76 on batch 1

AMAT 47 cc rolled out next week for 0.35 credit. Cb now 46.64 on batch 2. Will let this one call out if ITM next week and this batch repaired from earnings after 5 weeks. However, this is a small account and I think I can do better with a #fuzzy.

Seems like 5 out of my last 8 earnings trades all went bad. Maybe time to reconsider earnings trades, at least as a #pietrade. Probably better to skip that week then re-establish the week after.

Also the triple ETFs have been easier to manage. Not saying lower risk, but easier to manage. The extra premiums allow you to roll easier, move strikes ITM, OTM, or ATM and still take in good credits. The higher premiums create more opportunities.

From an income standpoint #pietrades make the most income but on a percentage basis the #fuzzies are doing better. Also better for smaller accounts.

So what does this mean, see below for the 45-22 DTE ladders for #pietrades. Small accounts will use spreads and #fuzzy, and #supercharger.

Have officially made back 33% of the SVXY losses. 3 accounts have fully recovered but 2 accounts have a long way to go. Having to be more conservative with those accounts as well because they are small/tiny now and another loss would wipe them out so the other reason I am looking at longer duration trades.

#pietrade Late post, too busy…

#pietrade

Late post, too busy yesterday and nearly everyday. Work is decreasing my trading profits. s

MU rolled the 55 cc that expires Friday out a week for 0.44 credit. Cost basis now 55.79. 2 more weeks should break even then can decide whether to keep rolling for profits or reset.

I may convert this and WDC when assigned to #fuzzies to free up margin for other #pietrades

Efficiency of capital round 3…

Efficiency of capital round 3 or 6, lost count.

While sitting in airports and riding in the plane was thinking about how to improve #pietrades and any trade you were assigned. Here is what might work, may convert MU tomorrow to see how it works.

1. set up weekly ladders, 21 DTE seems to be ideal except going into earnings. EXPE and WDC are holding most of its time value right up until tomorrow. Less chance of getting assigned, easier to adjust farther out, more premium for strikes OTM. Also they decay quickly enough you can usually roll in 1-2 weeks if they stay OTM.

2. If put deep ITM better to take assignment and convert to covered calls.

3. However, instead of taking the stock long term like I did with GM (22 weeks), may be better to sell the stock at a loss and reset to a #fuzzy using a calendar or lower strike call. Then you are in the trade longer term, cost basis goes up, but the big advantage is you free up a ton of margin to use on more profitable trades. Then just a matter of recovering the initial loss and working the LEAPs down to cost basis of zero.

I may try this as a long term experiment with MU tomorrow, close to break even on cost basis but want to keep collecting MU premiums but would rather not hold the stock for 24 months. This is how I recovered a 17 point drop in SWKS so I know it works. My only concern is could end up with a bunch of #fuzzies when what I really want is #pietrades. However, once profitable could close out the #fuzzy and reset.

Will keep everyone posted.

#fuzzies #longcalls KR Driving across…

#fuzzies #longcalls KR

Driving across I76 toward Denver listening to all my rowdy friends have settled down sold Oct. 24 call for 4.95, bought for 2.40,currently unhedged by chance only, KR up big after earnings

Some observations as I closed…

Some observations as I closed out another week. Good 3 weeks 🙂 the pull back a few weeks ago really helped.

1. Critical mass on accounts seems to be around 50k. At that point the compounding really starts to kick in and the account becomes self sustaining for positive theta, #pietrades, income trades. Trades that need to be adjusted do not seem to affect the account value as much at these levels as well. Trading 6 different accounts with different values, lowest $3500 so can really see the difference. Each contract adds a lot more cash each week. 5-10 contracts is where the income really starts to compound and pay off. Even 3 contracts is a lot better than 1 unless talking AMZN or PCLN.

2. Some names are just better than others. GM is out as soon as it closes this week. Names with perceived high volatility but don’t really move around a lot and have good premiums (0.5-1% per week minimum) do the best and are easier to adjust.

3. I try to suck all the time value out of an option but once down to 0.2 roll it for better theta decay.

4. defending trades, easier to do it before the option goes way ITM or better yet, roll it before it even gets there. You will loose a little in time value but by rolling earlier you can stay ahead and continually bring in credits. Now if it is sitting right ATM I will wait until the last minute to roll it but if there is any time left, easier to roll early.

5. Taking a slight directional bias really increases returns. Allows to sell puts closer to ATM and also time call sales better.

6. For small accounts the #supercharger seems to work the best. Better ROI than credit spreads, less adjusting, less risk overall (defined) and more cushion for pull backs as you are already deep ITM. However, have to work the spread on entry or the exit is not as profitable. For any of my accounts under 10k I will be doing a lot more of these. 10k and up probably #pietrades with some #fuzzies thrown in. Occasional #spycraft as well but to be honest the #supercharger are doing much better when we have pull backs and more consistent gains.

Sitting on my hands until Fri. Hopefully we have a pull back, at least a little one where no one gets crushed 🙂

#fuzzy

Hello Everyone, I have a…

Hello Everyone,

I have a general question about putting together an equity portfolio. After speaking with several investment advisors, I realized that all of them have a very limited understanding of using options as investment strategy. They understand ETF’s and stocks, but that’s about it.

This portfolio is separate from the rest of the investments, so allocation for bonds, etc.. is not an issue.

Most portfolio ideas are around proper allocation between stocks, using high quality companies and dividend payers. Well, many dividend aristocrats have a nasty looking charts, like PG and JNJ. Also, the market is at the high level at this point for many stocks.

If you would be starting a new portfolio, what would you do?

Assumptions:

  • Value 100K (to make it simple)
  • Time horizon 10+ years
  • Preferably low maintenance portfolio, because of limited time for monitoring.
  • Would you use ETF’s, stocks (growth or dividends), options or a mix of everything?
  • I am thinking of PIEtrades as a starting point.
  • How would you allocate the funds?

All opinions are welcome.

#fuzzies, #pietrades