thanks for the idea @honkhonk81
Jeff what is your thought process on your T puts? CSP? in between divi?
EOG this week 88.5 cc rolled out to 4/5 and up to 89 for 0.20 credit. Cost basis 92.63. Should be a few more rolls to break even.
EOG has excellent premiums but hard to #pietrade. It will move $6 in a week. This one better to swing trade/time I think.
NOTE: NTAP here is accounted as full loss, even though I will probably hold stock in to next week.
NOTE ALSO: INTC here is accounted as taking stock assignment and then closing all a week later. What I actually did was close only half, and converted the other half of stock into a #PieTrade.
Today I lightened the load, selling slightly less than half of the stock for 49.00.
I’m converting the rest into a #PieTrade, so I sold to Open $INTC March 15th 50 covered calls for 1.01.
#LongPuts #LEAPS -I’m a little disappointed in this one. It could’ve been a really good one but nat gas just imploded way faster than I thought was possible and my ratio was a little high on the put sales. On the bright side, between this and BOIL the Nov spike worked out ok.
Bought to Close UNG FEB 15 2019 29.0 Puts
Sold to Close UNG JAN 17 2020 28.0 Puts
All said and done it’s a .50 winner on a 15 lot…
So obviously with the market rout all my #pietrades went ITM and to prevent a meltdown in margin I converted them all to #fuzzy. Which is great, has controlled the volatility and still have 111 weeks to manage them. But as @fuzzballl points out below, they are expensive. Cheaper than stock but my EXPE puts are now trading at 22.40 and 19.50. Not chump change.
The #pietrade idea is sound for income generation and even some capital gains long term as long as you sell the call ATM or OTM once assigned the stock. You also are typically only selling 1 side and as Karen the supertrader (now scam artist) figured out, selling the other side is what really improves long term returns and consistency. She may have been using some creative accounting but the idea is sound and has been proven by tasty trade.
So here is the tweak I have been playing with. When you set up the trade, start it as a #jadelizard but set it up ATM. For example with XBI currently at 78.02 I would sell the 10 DTE 78 puts naked (cash secure) and then sell the 78/79 call credit spread. Total credit 2.55. No upside risk, downside break even is 75.55 which is lower than where I probably would have just sold the put.
3 possible outcomes
a: below 78 assigned shares on the put at 78 but cost basis 75.55. Can sell a next week call or call credit spread if you think rebound, then uncapped upside
b: Between the strikes max profit and you may be assigned on the call but can exercise your long call if needed.
c: above 79 everything cancels out and you keep the credit minus $1.
Here’s a graph on a 10 lot.
I have been trading it on paper and it would have had better loss control on the #pietrades than straight put sales the last 2 months.
Thoughts, holes in the strategy, other ideas to tweak it or make it better? If you wanted to be more conservative could sell strangles OTM instead or straddles ATM on the short sides but then less credit. Since my premise is income, I am trying to bring in as much credit as possible on the front end.