Wave Chasing

I haven’t done any option trading since the last time I was trading back in 2000.

Thinking about doing some covered puts – it’s easy enough to calc out my limit price based on my trading targets and strike prices – doesn’t cost anything to throw the order out there – option prices can do some wacky things and you never know when you could get it filled at the price you want. Then exercise that sucker and close the trade out.  (Obviously also make sure any outstanding limit order is cancelled if the trade closes before I can get the option contract.)

It’s hardly an aggressive strategy, but we’ll see what it brings.

Not a bad day, and certainly not a bad week at all. Making a lot of good recovery from those subprime hits earlier in the month.

Expecting more light volume next week – last week of summer and heading into the holiday weekend, I suspect there will be a lot of folks at the beaches.

Enjoy the weekend.

Closed:
Part of an AAP pick I was accidentally overweighted in, +1.6% , held 16 days
[b] MCD, +3.00%, held 5 days
[b] GLW, +3.01%, held 4 days

Opened:
[a] GILD (pretty sure I screwed up the buy on this – we’ll see)
[c] DOM

Month to Date:
Main trading port: -3.40%
Retirement port: 0.24%
Brokerage: 0.17%
BBE Overall: -2.12%
% of Trading Targets reached: -5.12%
I’m fucked ratio: 4.8 to 6.5
Long to Cash %s: 66.71% to 33.29%

~~~
[a] Stockpickr 3×2
[b] AAP
[c] Dividend play

Just sat around waiting for the other shoe to drop today. CFC’s Mozilo decided to use the R word, which didn’t exactly help, but didn’t tank things either at least.

One potential dividend play on tap for tomorrow – DOM – depending on the volume.

Closed:
[a] ITWO +1.45%, held overnight
[a] CMCSK +.6%, held 5 days – eh, not great, but better than the alternative

Opened:
AAP pick

Month to Date:
Main trading port: -5.29%
Retirement port: -0.30%
Brokerage: -0.89%
BBE Overall: -3.17%
% of Trading Targets reached: -29.89%
I’m fucked ratio: 6.4 to 6.2
Long to Cash %s: 63.70% to 36.30%

~~~~
[a] Stockpickr 3×2

The Nikkei gapped up 2.5% and holding, overnight futures are way up as well.

Obviously the real question is whether or not this can hold through the open tomorrow.  Sure would be nice if it did – I’d love to see an up day with some real authority to it.

Big gap at the open, then just a slow drift down & sideways for most of the day. The crappy 2:30 headline that I figured would tank things for the day: Lehman Brothers closing their mortgage unit… Amazingly, it didn’t seem to have much of an impact. Little pop at the end, based on who knows what.

Main port ended slightly off, retirement port slightly up, and the brokerage made an excellent comeback from all the recent nonsense.

Closed:
[a] ETY +2.38%, held overnight
[a] EXG +1.31%, held overnight
[a] BT +1.00%, held overnight
[b] RYAAY +3.01%, held 4 days
[b] IMCL, + 1.79%, held 3 days

Opened:
[b] ITWO

Month to Date:
Main trading port: -5.85%
Retirement port: -0.50%
Brokerage: -0.98%
BBE Overall: -3.48%
% of Trading Targets reached: -35.04%
I’m fucked ratio: 6.6 to 6.2
Long to Cash %s: 70.06% to 29.94%

~~~
[a] Dividend play
[b] Stockpickr.com 3×2

Pretty much rangebound today. Quiet day, and frankly, it was a little unnerving. Retirement port up fractionally, brokerage a little better, main port up .5%.

Not seeing anything spectacular as far as dividend plays for tomorrow go – I may just take the afternoon off.  (When I do these, I make the buy in the last 15 minutes of the session.)

Closed:
[a] NZT +2.29%, held overnight
[a] PHI +2.43%, held overnight
[a] MCGC +1.01%, held overnight
[b] GOOG +2.12%, held 3 days (though this one didn’t meet the 3×2 sell criteria, I just had a weird feeling about it and decided to take my quick 2% and run.)

Opened:
[a] EXG, ETY, BT
AAP pick

Month to Date:
Main trading port: -5.47%
Retirement port: -0.79%
Brokerage: -2.44%
BBE Overall: -4.28%
% of Trading Targets reached: -55.13%
I’m fucked ratio: 8.0 to 6.1
Long to Cash %s: 94.21% to 5.79%

~~~
[a] Div Plays, annualized returns on these are now 62%.
[b] Stockpickr.com 3×2

Have to just share on this one, cause it’s been working pretty darn well. Since I’ve gotten back from the beach, I’ve done 16 of these dividend trades and at the moment, I am pulling a 28% annualized return on them.

Very happy with this.

If the 3 plays I opened today work out, it will bring it to 43%.   I’m only looking to pull 1% out of the trade + the dividend since it is only an overnight trade.  Quick example (no comissions):

$10 stock, .30 dividend.  Buy at 1000 shares @ $10 the day before it goes ex-dividend.  Sell the day it goes ex-div @ 9.80.  $300 dividend + -200 on the trade, net $100 for a 1% net.

Working well so far.

OK, that was just weird – much quieter than I had anticipated. Little pop at the open, drifting downwards as some selling into “strength” occured, then a bit of buying starting around 2 and then a bit of a backslide later.

COF came out right after the close an announced that they’re closing down their mortgage unit. That should make things pretty at the open tomorrow.

Overall, not a bad day though. Main trading port won the day, with the retirement port in second and the brokerage in 3rd.

Closed:
[a] STLD +3.01%, held overnight
[a] RCII +1.12%, held overnight
[b] HQH +3.40%, held overnight
[c] UNP +3.00%, held overnight

Opened:
[a] IMCL
added to an AAP pick, and one new AAP pick
[b] PHI, NZT, MCGC

Month to Date:
Main trading port: -6.00%
Retirement port: -0.82%
Brokerage: -2.64%
BBE Overall: -4.42%
% of Trading Targets reached: -59.60%
I’m fucked ratio: 8.4 to 6.0
Long to Cash %s: 102.82% to -2.82%

~~~
[a] Stockpickr 3×2
[b] Dividend play
[c] AAP

Nikkei up and holding, US futures up as well.

Should make for an interesting open.

Before I head to the pub.

Nikkei +3.9% – holding those gains nicely so far
Shanghai  +2.2%

Maybe we’ll see a pop at the open – but will it hold for us?