Comment by phil

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phil
May 17th, 2018 at 12:16 pm

Butterfly Portfolio Review:  We still have just 2 positions but those 2 positions have made $13,702 (13.7%) in 4 months for our entire portfolio with $87,030 on the side.  OIH is just a long so only DIS is a real butterfly but I think we can sell some calls on OIH and get back to business there.  

As I noted to Yodi re. GOOGL this morning, I want to pick stocks that stay in their channel and they are few and far between in this market so I have not been enthusiastic about adding Butterfly Positions but I don't think making 40% annual returns while we "wait" is being negligent, right?  



DIS – The May short puts will expire worthless and, fortunately, we didn't sell short-term calls this cycle but now we can take advantage of no earnings until Aug 6th (that week) and sell 5 (1/3) the July $105 calls for $2.90 ($1,950) along with 5 July $100 puts at $1.60 ($800) to pick up another $2,750 over 60 days against our net $7,100 long position so that's about 20% a month we're pulling in on our DIS allocation!  



OIH – While our bullish position is fantastic and now up $8,000, that's not why we put things in the Butterfly Portfolio (we prefer to make 20% a month like we're doing with DIS).  We can now sell 10 (2/3) of the 2020 $30 calls for $4.25 ($4,250) and that means we can fearlessly sell 5 July $29s for $1.78 ($890) but no short-term puts from this height and, in fact, let's put a $1.75 stop on the short 2020 $23 puts to lock in those gains. 



I think AAPL is going to enter into a sellable range as $1Tn ($205) should be a short-term top we can rely on and $170 should hold as a floor so let's begin working into a new position on AAPL by picking up 10 2020 $180 ($28.30)/$220 ($12) bull call spreads for $16.30 ($16,300) and selling 5 2020 $165 puts for $11 ($5,500), with the intent of selling 5 more when AAPL bottoms again.  The $185 puts are $19, so that's around our goal for the next 5.  We won't sell short-term puts but we can sell 5 (1/2) of the July $190 calls for $4.80 ($2,400) as earnings won't be until the first week of Aug so we're counting on the usual nonsense taking AAPL lower into earnings.