Financial Solution News

I’ve spent some time this morning trying to find a new trade, but can’t zero in on anything that seems like a good move. I went back to this week’s Barron’s and saw that even the strategists they polled can’t come up with a good consensus of what’s hot and what’s not.

Six of them say to avoid Consumer Discretionary stocks and three say they favor the same sector.
Four say to avoid Financials and two favor Financials.
None of them says to avoid Tech, but a few like it and that’s one I’m not sure of based on that $COMP chart I drew this past weekend.

Here’s the Barron’s article for those interested in seeing the table.
Once I think I am getting close this market throws me a curveball like on JOYG.?? JOYG beat earnings and forcast a good future, but is down 7% today and was down more.?? I can only assume […]

Original post by Alex Fotopoulos

I’m on a roll with selling strangles lately.  I’ve sold one on CHK, TDW and today I did the same on AA.  None of these is a pure strangle since I’m long the stock too, but that’s probably the best short description.  The biggest difference is that I have more “positive delta” (measurement of the change in an option’s price based on the change in a stock’s price) with the long stock position in the middle of the option strikes.  I’ve been doing this strategy more lately because I see more and more stocks trading sideways in a trading range and this gives me the opportunity to profit on both sides, the bottom floor and the top ceiling.  (The options I sold on BNI are a “straddle” since the strikes are the same dollar and month.)
While AA was trading at $31.49 just before lunch, the limit order I placed an hour earlier hit.  […]

Original post by Alex Fotopoulos

I’m on a roll with selling strangles lately.  I’ve sold one on CHK, TDW and today I did the same on AA.  None of these is a pure strangle since I’m long the stock too, but that’s probably the best short description.  The biggest difference is that I have more “positive delta” (measurement of the change in an option’s price based on the change in a stock’s price) with the long stock position in the middle of the option strikes.  I’ve been doing this strategy more lately because I see more and more stocks trading sideways in a trading range and this gives me the opportunity to profit on both sides, the bottom floor and the top ceiling.  (The options I sold on BNI are a “straddle” since the strikes are the same dollar and month.)
While AA was trading at $31.49 just before lunch, the limit order I placed an hour earlier hit.  […]

Original post by Alex Fotopoulos

After my 100 shares of Tidewater (TDW) closed below my covered call stike on Friday I decided to sell new covered calls while at the same time selling new naked puts at a lower strike.  While TDW was trading at $55.68 I sold one TDW October 55 covered call in the money and received $379.25 after commissions.  I followed that immediately by turning the covered call into a strangle and sold one TDW October 50 naked put out of the money and received $134.25 after commissions.
I debated if I should sell at the same strike or not.  After deciding not to sell at the same strike I had to choose what the two strikes would be.  I decided to sell slightly in the money with the covered call since the premiums are so good and I wanted to increase my chances for having more money in two months than I have now.  I’ll actually take a […]

Original post by Alex Fotopoulos

This is how my August options closed on Friday along with my plans for these same equities moving forward.
AAPL closed at $175.74 leaving my August 155 naked puts out of the money (OTM) and giving me a full profit.  I plan to write a new naked put on AAPL when it takes another dip.  I haven’t picked my strike yet.
BA closed at $64.45 making my August 75 naked calls out of the money and giving me a full profit.  I’m still long on BA in my IRA where I consider it a longer term hold.  I’ll be re-writing covered calls well OTM there and might write more naked calls in my taxable account.
CELG closed at $75.86 leaving my August 60 naked puts out of the money and giving me a full profit.  CELG has been on a good run for a while.  I need to research it again to decide if I should get […]

Original post by Alex Fotopoulos

I bought 100 shares of USO (an oil ETF) at $99.00 and sold a September 98 covered call for $6.80 in my IRA a little more than two weeks ago.   I’ve watched the price of oil fall fairly steadily since then.  Around the same time I entered a limit order to sell a naked put on the same ETF if/when it dropped further.  This morning while USO was trading at $90.54 I sold one USO September 90 naked put (UNAUL) and received $499.25 after commissions. 
West Texas Intermediate (WTI) Crude Futures were trading around $112 at the time.  Some analysts think WTI could drop as low as $90-100.  If that’s the case I’ll be assigned the 100 shares of USO and will sell covered calls on it, hopefully at the same strike while I wait for a rebound.  Had I not been sleeping at the wheel I probably would’ve lowered my strike some on this order, […]

Original post by Alex Fotopoulos

Monsanto (MON) has dropped more than $30 in the past two months.  I targeted $115 as a bottom and sold a naked put at the August 115 strike that expires today.  MON fell as low as $103.50 a week ago and I held on thinking I could sell covered calls and still do fine with it if assigned.  It edged up over 115 yesterday and I thought I might get out with a full profit.  That hope was dashed this morning.
While MON was trading at $111.70 this morning I bought back my August 115 naked put (MFPTC) and received $360.74 after commissions.  I received $499.25 from the original 6/27/08 naked put sale.  I took a profit of $138.51 and will most likely sell a new naked put at a lower strike when I see MON closer to the bottom of its trading channel.  I still like the stock long term, […]

Original post by Alex Fotopoulos

Vimpel Communications (VIP ) has been down for a while and I’ve actually been surprised that my latest naked puts had not been assigned earlier.  This morning my two VIP August 30 naked puts options (VIQTF) were assigned and I bought 200 shares of VIP at $30.00 and I paid $6019.99 with commissions.  A couple of days ago I wrote about selling new VIP calls, this is why I did it early.  I set my limit high enough to only hit in a spike and then assumed I’d own the shares soon enough to cover the calls.  Now I own the shares and those naked calls are now covered calls.
I’ve taken in a lot of premiums on VIP over the past few of months and even with the share price down more than $10 I’m still sitting around break even on the series of trades.  Here are the trades I’ve made on VIP for this series.  I […]

Original post by Alex Fotopoulos

I mentioned my plans for Chesapeake Energy Corp (CHK) in my post yesterday and today I acted on it.  While CHK was trading at $45.16 I sold two CHK September 50 covered calls (CHKIJ) and received $318.50 after commissions.
I saw CHK was up again this morning, but hit resistance at the 10 day moving average.  On the other hand, it broke the trend line of lower highs and the low of today hit that line and used it as support.  That showed a bullish picture to me, but I decided the 10 day moving average could be more important and decided not to wait any longer to see how it played out.  As CHK moved closer to break even for the day I entered my limit order between the bid/ask and it hit three minutes later.  It’s now three hours since my order hit and CHK is up to $47.39 so far.  That’s $2.23 higher than where […]

Original post by Alex Fotopoulos

I was able to check the market yesterday before we walked down to the beach and again after closing.  I had a couple of trades while away for two days.  The first was a limit order I entered a few days earlier on VIP naked calls.  While VIP was trading somewhere near $25.40 on Monday morning my limit order hit and I sold four VIP September 25 naked calls (VIQIE) and received $987.00 after commissions.  That was the high trade of the day for that strike.  VIP cut its gains before lunchtime and I had a quick profit. 
If only the picture was really that pretty.  I’m long 200 shares of VIP that with August 30 covered calls on those shares.  I also have 200 shares I’ll be assigned in a few days from two August 30 naked puts I sold a while ago.  While I called these latest call options “naked”, […]

Original post by Alex Fotopoulos