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IRA Portfolio update #4

Welcome to the fouth update of the IRA Virtual Portfolio.  First I am going to summarize the current state of the Portfolio then I will get into all the activity we had during September expiration.  

Profit and Loss – Net of closed positions the portfolio is up a total of $769

Market Commentary – Last expiration I said, "I would like to put a total of $20,000 to work by the end of SEP expiration. If the VIX pops up to around 20 I plan to put about $50,000 total to work." The market didn't quite reach the goal but I did manage to deploy $15,000 of buying power. I still feel the market is too high and expect a correction during October. If the vix pops up to around 20 I still plan to put about $50,000 to work. If a correction doesn't happen I still plan to have a total of $25,000 in buying power put to work by October expiration.  Now on to the activity.

AEM – Agnico Eagle Mines Limited;

  • On 9/10/2013 I sold 1x OCT 27.5 PUT for a credit of $150 to initiate a position.(member chat link)

BTU – Peabody Energy Corporation;

  • The SEP 19 CALL I sold expired worthless.

VLO – Valero Energy Corporation;

  • On 9/20/2013 I rolled the SEP 35 PUT to the OCT 34 PUT for a credit of $44.(member chat link)

FCX – Freeport-McMoRan Copper & Gold Inc;

  • On 9/10/2013 I bought back the SEP 29 PUT for a debit of $5.(member chat link)

X – United States Steel Corp;

  • On 9/10/2013 I bought back the 2x SEP 17 PUT for a debit of $10 total ($5 for each PUT).(member chat link)

Here is a link to the spreadsheet we use to track the portfolio. LINK





IRA Portfolio update #3


Welcome to the third update of the IRA Portfolio. First, I am going to summarize the current state of the IRA Portfolio then I will get into all the activity we had during August expiration. In addition, I want to amend something I said when this portfolio began. I said we expect close to 20% annual returns. However, our returns are greatly dependent on the VIX. The higher the VIX the more our cost basis can be reduced on order entry. Unfortunately the VIX has been hovering around 14 which is historically low. So I am not going to make any predictions about the returns of this portfolio. Lets just do the best we can and see where we are after a year.

Profit and Loss – Net of closed positions we are up a grand total of $384.

Market Commentary – I still feel that the market is much to high and volatility much to low to commit a large portion of the portfolio. However, I do feel that our current exposure of about $5600 is way to low for a 100k portfolio. To remedy that I am going to be looking for places to put some additional money to work. I would like to put a total of $20,000 to work by the end of SEP expiration.  If the VIX pops up to around 20 I plan to put about $50,000 total to work.

ABX – Barrick Gold Corporation

  • On 8/9/2013 we closed out the AUG 16/11 PUT spread we sold. We closed it for a debit of $8.(member chat link)

AAPL – Apple Inc

  • On 8/2/2013 we closed out the AUG 420/370 PUT spread we sold. We closed it for a debit of $5.(member chat link)

BTU – Peabody Energy Corporation

  • On 6/9/2013 we closed out the AUG 16/11 PUT spread we sold. We closed it for a debit of $3.(member chat link)

FCX – Freeport-McMoRan Copper & Gold Inc

  • On 8/6/2013 we decided to add some FCX to the portfolio by selling the SEP 29/24 PUT spread for a credit of $88.(member chat link)

VLO – Valero Energy Corporation
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IRA Portfolio update #2


Welcome to the second update of the IRA Portfolio. First, I am going to summarize the current state of the IRA Portfolio then I will get into the specifics of the specifics of all the activity we had since the last article.

Net of closed positions we are up a grand total of $11. However, our open positions in AAPL, CLF, ABX, and SLW are all profitable and waiting to be closed. Below is the summary of our activity for the last month.

ABX – Barrick Gold Corporation

  • No new trades since the last article.  With ABX trading at 17.82 the AUG 16/11 Put Spread we sold is looking safe.

AAPL – Apple Inc

  • On 7/19 we rolled the JUL 430/380 Put Spread to the AUG 420/370 Put Spread for a credit of $72. (member chat link)

BTU – Peabody Energy Corporation

  • On 7/19 BTU was trading at $16.45 so we had to adjust the 20/15 Put Spread we sold. So, we bought back the short 20 put for a debit of $355 and bought 100 shares of BTU for a debit of $1670. Next we sold 1x SEP 19 CALL for a credit of $38 and sold 1x AUG 16/11 PUT Spread for a credit of $66. This leaves us with 100 shares of BTU at a cost basis of $18.09 per share. (member chat link)

CLF – Cliffs Natural Resources Inc

  • On 7/19 CLF was trading at $17.71 so we had to adjust the 20/15 Put Spread we sold. So, we bought back the short 20 put for a debit of $232 and bought 100 shares of CLF for a debit of $1771. Next we sold the AUG 17/12 PUT Spread for a credit of $85 and sold the AUG $19 CALL for a credit of $60. This leaves us with 100 shares of CLF at a cost basis of $17.58

X – United States Steel Corporation

  • The JUL 17/12 Put Spread we sold expired worthless.

SLW – Silver Wheaton Corporation

  • The AUG 19/14 Put Spread we sold is almost worthless so we will look to close it early next week.

Below is the state of the IRA Portfolio as of 7/28/2013.





IRA Portfolio update #1

Reminder: Craigzooka is available to chat with Members regarding his virtual portfolio performance, comments are found below each post.

Welcome to the first update on the IRA Portfolio. The plan, from here on out, is to do a recap of the portfolio every options expiration. In this recap we will do a review of all the activity in the portfolio for the last month and talk about our plans for the next expiration. We had a decent amount of activity over the last month, so lets get to it!

ABX – Barrick Gold Corporation

  • On 5/21/2013 in, member chat, we said, "ABX has gotten to cheap and the premiums to juicy to ignore any longer. So our first position in the NEW IRA portfolio will be ABX. We are scaling into a $10,000 position so for the first round we will sell a put spread and hope we have a chance to buy the shares even cheaper. The 19-14 put spread in JUN is trading for $.80 and the 19-14 in JUL is trading for $1.09. I don't think the extra $.29 is worth missing the opportunity to potentially sell JUN for $.80 and then JUL for another $.80. So our first trade will be selling 1x the 19-14 put spread in JUN for a $80 credit."
  • Our first trade went spectacularly and on 6/6/2013 the short 19 PUT was trading at $13. There was no reason to be greedy and risk the $67 profit to make $13 more so we bought back our short 19 PUT for $13 and booked our first winner ( member chat link ).
  • When we first initiated the trade we were ready and willing to buy more if it got cheaper. By 6/21/2013 ABX had gotten way cheaper so we initiated another position. We sold the 16/11 PUT Spread for a credit of $101. ( member chat link )

HPQ – Hewlett-Packard Company

  • On 5/21/2013, in member chat, we said, "Adding an opening position in HPQ as well. Selling the 21-16 Put spread in JUN for a credit of $104. Once again, we really hope they crash and we will get to pick them up cheaper, but we might as well sell some premium while we wait for that to happen."
  • Two days later HPQ popped after earnings and we were able to close


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The IRA portfolio

Reminder: Craigzooka is available to chat with Members regarding his virtual portfolio performance, comments are found below each post.

By Craigzooka

I am going to share with you how I manage my IRA and the power of reducing your cost basis.  My goal each year is a 20% return in my IRA.  Sometimes I make it and sometimes I don't, but I believe that all of my success is due to reducing my cost basis.  To illustrate the power of reducing your cost basis here are some trades we did last year.  These trades are taken from an educational portfolio we ran in a paper-trading account for a little more than a year.

  • We bought RIG on 5/15/2012 for $44.13, sold it on 1/18/2013 for $46 but booked a profit of $1,154.
  • We bought MT on 1/4/2012 for $19.24, sold it on 12/21/2012 for $15 but booked a profit of $454.
  • We bought CHK on 1/27/2012 for $21.93, sold it on 10/19/2012 for $18 but booked a profit of $800.50.

We were able to lower our cost basis so much by selling calls and occasionally buying additional stock to lower the basis.  We did this mechanically without thinking about market conditions.  I think we can do better.  For the foreseeable future I am going to paper trade a 100k portfolio using IRA margin rules and track it using a TOS paper trading account.  I am going to detail the strategy below.

Position Sizing 

We don't want one single position to take down the whole portfolio so we are going to risk a maximum of 10k to each stock.  Unless there is a once in a lifetime opportunity, we will not spend more than 10k of cash on any one stock.

Position Entry

We hope to eventually own stock but while we wait lets have someone pay us not to own it.  We will enter positions by selling a put spread.  Should we be put the stock we want it to take up less than 5k of cash, so don't sell too many put spreads to begin with!

Managing Put Spreads

So a put spread we sold is now in the money.  Fantastic!  We wanted to buy the stock cheaper and now they are giving us a chance.  So let them put us the shares and we will begin selling calls…
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Virtual Portfolios Update – 11/18/2012

FAS Money

$25KPA

$25KPM

AAPL Money

Peter's Strangle Portfolio

Income Portfolio





Virtual Portfolios Update – 11/9/2012

 

In order to centralize weekend comments regarding the virtual portfolios, we thought that it would make more sense to write a post outlining the current positions. The portfolios spreadsheet is currently up to date and can be viewed here

Income Portfolio

 
Some stocks in the news this week:
 
RIG - Upgraded to Buy at Argus and The Street Rating.
CSCO - Reports earnings on 11/13.
HPQ - Hit a new 52-week low on Friday.
JRCC - Victim of the election!
SBUX - Upgraded to Buy at Argus
BBY - Buyout offer expected from Richard Schulze. Rumored to be below $24.00. Our net is $18.84.
SHLD - Reports earnings on 11/15.
CLF - Reached an agreement with labor union.
CMG - Reiterated as Buy at The Street Rating.

FAS Money

25KPM

25KPA (High Margin Portfolio)

MoMo Portfolio (managed by lflan)

AAPL Money (High Margin Portfolio)

Strangle Portfolio (Managed by Peter – High Margin Portfolio)





Weekend Virtual Portfolio Update 2/26/2012

My last weekend update is dated from January 30 so after a long hiatus, here is an update of our virtual portfolio. Since the last update, we have closed the AA Money portfolio due to a lack of enthusiasm (and activity) and I have stopped tracking the FAS strangle as the low VIX makes it hard to get rewarded for the risk! But we have added a small $5KP virtual portfolio which does not use any margin.

FAS Money

We have had to recover from a big move up by FAS and a low VIX which keeps option prices low. But the portfolio has gaine about 10% since the last update.

Last update P&L – $5499.00

IWM Money

Not a lot of activity in this portfolio where the main focus is on the large IWM BCS. But the portfolio has grown over 20% since the last update.

Last update P&L – $1998.00

$5KP Portfolio

This is the virtual portfolio that replaced the AA Money portfolio. It does not use margin and we will keep holdings under $5K.

AAPL $50K Portfolio

What is there to say about this portfolio…. $132K of profit in a bit less than 3 months. Unbelievable and great job by lflan!

Last update P&L – $53,205.00

$25KP Portfolio

Comments about this portfolio can be found in Phil’s daily post. I have included only February trades as the list of trade is getting too long to fit in the article.

Last update P&L – (-$5447.00)





Weekend Virtual Portfolio Update 1/30/2012

Here is a quick update of past trades and our current position.

AA Money

No trade this week as we wait for AA to settle. Phil remarked last week that AA seemed overvalued. In the meantime, it looks like we might have to roll our Feb 9 calls. Good thing we sold only 5 of them against our position.

Last week P&L – 310.00

We lost ground last week, but we still have 11 months to sell premium!

FAS Money

Very good week for FAS Money as we benefited from the large amount of premium sold the previous week. We covered most of the shorts in advance of the Fed speech, but sold another set of options on Wednesday after the speech - 2 FAS calls that expired worthless on Friday, 2 FAS put that we are still holding and 2 FAZ put that we bought back for a profit on Friday. A late stick comparable to last week’s almost gave us problems at the end of the day though!

Last week P&L – $4277.00

IWM Money

A decent week in this virtual portfolio. As with FAS Money, we covered most of our short positions before the Fed speech, the difference being that we were more bearish in this portfolio and the early run last week damaged the position. We sold more options after the speech as well – TZA and TNA puts and TNA calls. We showed some small profits on the TNA options but had to roll the TZA puts and the TNA calls at the end of Friday to counter the late stick.

Last week P&L – $1682.00

FAS Strangle Experiment

A decent week even though we stayed away after Wednesday… We benefited from the set of calls sold last Friday when we rolled our position due to a late stick. The market sold off early Monday and we were able to get out with a nice profit. We sold another profitable strangle on Tuesday and that was the extent of our trades last week!

Last week P&L – $10,350.00

Still, we are now up to 50% of PM margin. Not bad in 10 weeks…

AAPL 50K Portfolio

Well AAPL didn’t disappoint in earnings and the portfolio took off… Great job by lflan!

Last week P&L – $33,385.00

$25KP Portfolio

As usual, I’ll let Phil comment this week.





Weekend Virtual Portfolio Update 1/22/2012

Here is the virtual portfolio weekend update. Basically a recap of the positions and some notes about the trades. As usual, I’ll post the previous week’s P&L for comparison. Not the greatest of week in general!

AA Money

Only transaction last week as we bought back the AA Feb 9 puts on Tuesday for close to a 70% profit. The idea is to sell another set of put as soon as we get a chance.

Previous week P&L – $400.00

We lost some ground this week, but we’ll keep on selling premium!

FAS Money

We also lost some ground in this virtual portfolio, but we have sold plenty of premium for the coming week. A little correction would go a long way to help! On Wednesday we sold the FAS Feb 72 puts (already good for 50%), on Thursday we added the Jan4 78 calls and on Friday we had to roll the Jan 78 puts to the Jan 80 puts. We were hoping for these ones to expire worthless on Friday, but a late stick killed that hope.

Previous week P&L – $4372.00

IWM Money

Not the best of week either here… As with the other portfolios we were a tad bearish with more calls sold. On Wednesday we sold the TNA Feb 47 puts (already up 40%) and on Thursday we rolled the TNA Jan 46 calls to the Jan4 49 calls.

Previous week P&L – $2046.00

As with the FAS Money portfolio, plenty of premium sold to get us back on track.

FAS Strangle Experiment

One bad move on Friday almost wiped out the entire week’s profit. There might be 2 lessons learned from that:

1) Every Friday will be different –  the week before, patience was rewarded, this week, a late stick punished it.
2) Better to take the profits when we can.

I also tried to time the entries better and it did help earlier this week but I still need to work on that.

Previous week P&L – $10,190.00

We start the week with over $1 of premium sold. All we need is a move to the downside to make up the loss.

25KP Virtual Portfolio

I’ll let Phil comment any of the trades. Here is a recap of the positions.

The SQQQ Jan calls expired worthless on Friday.

Apple 50k Virtual Portfolio

I’ll let lflan add his…
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Help One Of Our Own PSW Members

"Hello PSW Members –

This is a non-trading topic, but I wanted to post it during trading hours so as many eyes can see it as possible.  Feel free to contact me directly at jennifersurovy@yahoo.com with any questions.

Last fall there was some discussion on the PSW board regarding setting up a YouCaring donation page for a PSW member, Shadowfax. Since then, we have been looking into ways to help get him additional medical services and to pay down his medical debts.  After following those leads, we are ready to move ahead with the YouCaring site. (Link is posted below.)  Any help you can give will be greatly appreciated; not only to help aid in his medical bill debt, but to also show what a great community this group is.

http://www.youcaring.com/medical-fundraiser/help-get-shadowfax-out-from-the-darkness-of-medical-bills-/126743

Thank you for you time!

 
 

Chart School

Time for the Pullback?

Courtesy of Declan.

Sellers were going to make an appearance at some point and today was the day they paid a visit. Whether a larger pullback emerges will depend on events over the coming days, but today's selling did emerge at some natural attack points for shorts.

The S&P finished with a 'bearish cloud cover,' but it did manage to hold declining resistance turned support, and the 20-day MA has entered the fray as an area for bears to work. But this wasn't the most bearish of the indices, and today's finish actually gives bulls a long play tomorrow (for a bounce off support).  Technicals also suggest a bounce.


While the S&P may give bulls something tomorrow, th...

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Option Review

LUV Options Active Ahead Of Earnings

There is lots of action in Southwest Airlines Co. November expiry call options today ahead of the air carrier’s third-quarter earnings report prior to the opening bell on Thursday. Among the large block trades initiated throughout the trading session, there appears to be at least one options market participant establishing a call spread in far out of the money options. It looks like the trader purchased a 4,000-lot Nov 37/39 call spread at a net premium of $0.40 apiece. The trade makes money if shares in Southwest rally 9.0% over the current price of $34.32 to exceed the effective breakeven point at $37.40, with maximum potential profits of $1.60 per contract available in the event that shares jump more than 13% to $39.00 by expiration. In September, the stock tou...



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Phil's Favorites

Larry Swedroe: Use Valuations for Expected Returns, Not Market Timing

Larry Swedroe: Use Valuations for Expected Returns, Not Market Timing

Courtesy of 

When forecasting investment returns, many individuals make the mistake of simply extrapolating recent returns into the future. Bull markets lead investors to expect higher future returns, and bear markets lead them to expected lower future returns. But the price you pay for an asset also has a great impact on future returns. Consider the following evidence:

The average historical P/E ratio for the market has been around 15. A study covering the period from 1926 through the second quarter of 1999 found that an investor buying stocks when the market traded at P/E ratios of between 14 and 16 e...



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Zero Hedge

Is This Why Stocks Closed Not "Off The Lows"?

Courtesy of ZeroHedge. View original post here.

Submitted by Tyler Durden.

1. October 16: "Buyers beware, the bear market has begun":

The selloff in global markets is set to continue as a bear market takes hold "for a long period of time," according to widely followed investor Dennis Gartman, who warned investors not to go long on stocks.

 

"This is the start of a bear market," Gartman, the founder of the closely watched Gartman Letter, told CNBC Europe's "Squawk Box" on Thursday. "You stay in cash and you stay in short term bonds and you don't move out, this i...



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All About Trends

Mid-Day Update

Reminder: David is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Insider Scoop

UPDATE: Brean Capital Initiates Coverage On GrubHub

Courtesy of Benzinga.

Related GRUB UPDATE: JMP Securities Initiates Coverage On GrubHub Inc Benzinga's Top Initiations Making Money With Charles Payne: 09/25/14 (Fox Business)

Brean Capital initiated coverage on GrubHub Inc (NYSE: GRUB) with a Hold rating.

Analyst Tom Forte noted that "catalysts for the stock include an accelerat...



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Sabrient

Sector Detector: Sharp selloff in stocks sets up long-awaiting buying opportunity

Courtesy of Sabrient Systems and Gradient Analytics

Last week brought even more stock market weakness and volatility as the selloff became self-perpetuating, with nobody mid-day on Wednesday wanting to be the last guy left holding equities. Hedge funds and other weak holders exacerbated the situation. But the extreme volatility and panic selling finally led some bulls (along with many corporate insiders) to summon a little backbone and buy into weakness, and the market finished the week on a high note, with continued momentum likely into the first part of this week.

Despite concerns about global economic growth and a persistent lack of inflation, especially given all the global quantitative easing, fundamentals for U.S. stocks still look good, and I believe this overdue correction ultimately will shape up to be a great buying opportunity -- i.e., th...



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Digital Currencies

Goodbye War On Drugs, Hello Libertarian Utopia. Dominic Frisby's Bitcoin: The Future of Money?

Courtesy of John Rubino.

Now that bitcoin has subsided from speculative bubble to functioning currency (see the price chart below), it’s safe for non-speculators to explore the whole “cryptocurrency” thing. So…is bitcoin or one of its growing list of competitors a useful addition to the average person’s array of bank accounts and credit cards — or is it a replacement for most of those things? And how does one make this transition?

With his usual excellent timing, London-based financial writer/actor/stand-up comic Dominic Frisby has just released Bitcoin: The Future of Money? in which he explains all this in terms most readers will have no tr...



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OpTrader

Swing trading portfolio - week of October 20th, 2014

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Market Shadows

Falling Energy Prices: Sober Look takes a Sober Look

Falling Energy Prices: Sober Look takes a Sober Look

What do falling energy prices mean for the US consumer? Sober Look writes a brief yet thorough overview of the consequences of the correction in the price of crude oil. There are good aspects, particularly for the consumer, bad aspects, and out-right ugly possibilities. For more on this subject, read James Hamilton's How will Saudi Arabia respond to lower oil prices?  In previous eras, Saudi Arabia would tighten the supply to help increase prices, but in this "game of chicken," the rules m...



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Stock World Weekly

Stock World Weekly

Newsletter writers are available to chat with Members regarding topics presented in SWW, comments are found below each post.

Here's this week's Stock World Weekly. Just sign in with your PSW user name and password. (Or take a free trial.)

#457319216 / gettyimages.com

 

...

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Promotions

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Traders and Investors,

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Pharmboy

Biotechs & Bubbles

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Well PSW Subscribers....I am still here, barely.  From my last post a few months ago to now, nothing has changed much, but there are a few bargins out there that as investors, should be put on the watch list (again) and if so desired....buy a small amount.

First, the media is on a tear against biotechs/pharma, ripping companies for their drug prices.  Gilead's HepC drug, Sovaldi, is priced at $84K for the 12-week treatment.  Pundits were screaming bloody murder that it was a total rip off, but when one investigates the other drugs out there, and the consequences of not taking Sovaldi vs. another drug combinations, then things become clearer.  For instance, Olysio (JNJ) is about $66,000 for a 12-week treatment, but is approved for fewer types of patients AND...



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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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