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PhilStockWorld February Portfolio Review

Image result for one million dollars animated gifImage result for one million dollars animated gif$2,722,442!  

That is up $203,740 since our January 19th review of our paired Long and Short-Term Portfolios.and that was up $309,256 from December so we are rocking AND rolling during all this messy volatility and we're up $2,122,442 from our $600,000 ($500,000 for the LTP, $100,000 for the STP) start back in October of 2019.

Our paired portfolio strategy is fairly simple, we buy long positions in the LTP and we buy hedges in the STP but THEN we look to hedge each portfolio internally – so we are always looking for ways to sell premium against our existing positions – which forces us to be balnaced – which make us the most money in a flat, choppy market (high premiums and we make money on both ends) – which is exactly the sweet spot we've moved into since early Novermber:

It's not that we can't make money in an up market – we ground out $1.6M worth of gains in the first two years but, in the last two months, we were able to make over $500,000 – though it's certainly not a pace that we're likely to keep up.  Whenever we are making more money than we're supposed to – we have to be concerned that we're heading into a period where we'll make less money than we expect to and, BEFORE that happens, we need to be sure the battle will be worth the fight – or the risk!  

However, we have a wonderful balance between the LTP and the STP and we just did our LTP Review in yesterday's Live Member Chat Room along with the Money Talk Portfolio Review yesterday morning and our STP Review was Tuesday, where we determined with have $726,610 of downside protection against a 20% pullback in the market.   The trick to being balanced is that we make about as much as we lose on the way down (anything better than covering half our losses is acceptable) while, on the way up, we expect our hedging losses to eat up about 1/3 of our gains.  It's very hard to get that balance right but we've spent 2 years on it and now it's working like a charm.  

If we are balanced properly, the rest is simply a matter of taking about 1/3 of our gains and putting them into more hedges on the way up and, when the market dips, we put more money into the positions we are most confident will rebound – like we did with Sunpower (SPWR) yesterday during my live appearance on Bloomberg's Money Talk (recording not yet available).  As we essentially discussed in yesterday morning's PSW Report (which you can subscribe to here):

MONEYTALK PORTFOLIO ADJUSTMENT: SPWR-NASQ

§  Buy back 25 SPWR short 2024 $35 calls at $2.09 ($5,225) 

§  Buy back 15 SPWR short 2023 $25 calls at $2.11 ($3,165) 

§  Roll 35 SPWR 2024 $25 calls at $3.65 ($12,775) 

to 35 SPWR 2024 $15 calls at $6.75 ($23,625) 

SPWR had earnings last night and they had record-high revenues of $384M but posted a 0.07/share loss ($7.6M) vs flat expected though, for the year, they are projecting to make $1 per $16.50 share – so I really don't know what the big deal is.  Still it's down this morning and that's great because it will be easy to get good prices for our adjustments.  This is a long-term play on the overall trend of solar energy – we don't really care about quarterly results so we simply buy more on the dips.  

And, by the way, that's what they expect to earn AFTER taking $20M off the table in potential earnings from the sale of their commercial division to TTE – a deal which is putting $350M in their pockets.  That is quite a lot of forward working capital for a company that only makes $100M/yr.  That probably makes this a great time to be long on SPWR and our system essentially forces us to make the proper play and add to it when it's down.  

Now, we'll take a look at our other Member Portfolios and see how they are faring:

Earnings Portfolio Review: If earnings season isn't a good time for an Earnings Portfolio Review – I don't know when is?  I am proud to say that we have made essentially no progress since our January 21st review, when we were at $308,733 and now we're at $309,833 so up $1,100 in a choppy market is fine by me in our self-hedging portfolio.  We did a detailed review last month and we had $138,826 in upside potential and that hasn't changed and yesterday we added a brand-new net $7,950 trade on CROX, which has an upside potential of $42,050 (528%) that's still there for the picking this morning – so don't say I never gave you a present!  

That means our upside potential is now about $180,000 and that's worth playing for and, if we're well-balanced – then it's just a matter of time before that short premium expires and we collect our winnings.  That's the beauty of our Be the House strategy – we don't care if the market is up or down or sideways – as long as it's not up too much or down too much – we will do very well.

The strategy for the Earnings Porfolio is that we pick up companies that were unfairly trashed on their earnings reports.  We take the opportunity to initiate trades at what we feel are steep discounts and then we simply wait for normalcy to return.  It's a very low-touch portfolio and we made no changes in last month's review but we did adjust our hedges later on in our Live Member Chat Room and, of course, added CROX yesterday.

  • IBM – Short puts are a great way to initiate a trade as we are PAID money (in this case $12,500) in exchange for our promise to buy shares (500) at a certain price ($125).  Since we collected $25 per share, our net entry on IBM would be $100 per share and, during the November sell-off – we were very confident that $100 would hold – even though the chart was terrifying.  As one of the last Fundamental Investors left on the planet – I work, very hard to break people of their chart-watching habits….

SQQQ – These hedges are insurance and, if your longs are doing well, your insurance will NOT pay off.  Our older SQQQ spread, the $25/55 spread from April, has lost net $19,600 – though I'm sure we sold some other calls along the way to offset it.  We bulked that up into Christmas with the $20/45 spread, which is doing well as the timing was good and, in January, we felt we needed more protection and added a big $40/50 hedge through March – just in case things went really badly.  

  • I am now going to teach you the greatest trick in hedging and it's called the Salvage Play – and it's featured in detail in our Strategy Section so here we're just going to do it.  On the Jan (2023) $25/55 spread, we invested net $17 in the hedge and now the 2023 $25 calls are down to $16.70, though this morning the Nasdaq is down and we should get $17.  By rolling that call, we are taking the $17 off the table and we can establish another spread that will cover the short $55 calls while buying us more protection so, we're going to roll the 20 2023 $25 calls at $17 ($34,000) to 80 of the 2024 $40 ($18)/60 ($14) bull call spreads at $4 ($32,000) so we're taking $2,000 off the table and now we have a $160,000 spread that's at the money covering the 20 (1/4) short Jan $55 calls, which have $9.10 ($18,200) of pure premium.  

We have SALVAGED our original investment and INSURED our postiions for another 12 months while taking the small(ish) risk that the $55 calls will go in the money but not before our net $24,000 spread is $100,000 in the money at $55.  You can't do that with term insurance, can you?  

  • The same goes for the March $40/50 bull call spread, which we won't need if 14,100 holds on the Nasdaq so we'll happily close it take the $3,275 loss there and be happy things were not worse for our longs.  Keep in mind it's not really a loss as having the hedges allowed us to keep the longs in play and ride out the dip.  Without the hedges, we would have capitulated on the longs and lost a lot more than $3,275!  

 So we now have the $160,000 2024 $40/60 spread that's currently net $32,000 so we have $128,000 of downside protection there along with the 2023 $20/45 spread that is mostly in the money and is a $50,000 spread at net $18,050 so another $31,950 of downside protection if the Nasdaq even twitches lower.  That ($159,950) seems like plenty of protection to me – enough so that we can look to deploy some of our $215,158 in CASH!!! and add a bit more upside to our $180,000 projection.  

  • CROX – Even cheaper today than it was yesterday and I love this spread!  
  • GILD – They took a huge dive recently – almost back to where we started and I love them too but now we don't know if June is enough time so, again, we SALVAGE our investment by rolling the 10 June $60 calls at $4.58 ($4,575) to 30 of the 2024 $60 ($7.50)/75 ($3.15) bull call spreads at net $4.35 ($12,450) and we'll pay for some of that by selling 5 of the 2024 $60 puts for $9 ($4,500) so we are spending net $7,950 and now we have a $45,000 spread that is 1/3 covered by our original short puts and that spread was net $2,000 so we're now in for $9,950 overall with $35,050 (352%) upside potential.  

  • GOLD – We're aggressively long and it's taking off again but far too early to cover.  

  • JACK – On track.
  • PETS – Also aggressively long and painfully so.  Since we are way ahead overall I don't mind spending $9,800 more to double down on our Jan $25 calls and we will cover them at around $35 if all goes well.  They made 0.21 in the last earnings (1/24), missing by 0.08 and the stock is up since so I believe the sellers have exhausted themselves at this point.  They also pay a nice $1.20 dividend as the company generates plenty of cash. 

  • SPWR – Another one I love!   We are already aggressively long so we'll just let it ride.  
  • VIAC – They just took a dive back to $30 but there's really nothing to change on the 2-year spread.  The Jan $35s at $6,150 are what's left after we bought the short calls back but I think we have long enough to recover.  At this point, if I had $19.25Bn, I'd buy the whole company!  

So there you go – it's a rag-tag, beaten down bunch of positions that need time to heal and most of them have 2 years to make what is now well over $200,000 and we are still about 2/3 in CASH!!! – ready for the next opportunity that comes out way.  

Next we will look to raise a bit more cash selling some short puts and then we'll look for a couple of more spreads as I think our hedges have us covered.  

Dividend Portfolio Review:  We only made one change in the last review on Jan 21st, when the portfolio was at $411,146 and that was just re-selling the expiring MO short puts and calls – very automatic.  This is a very low-touch portfolio and this morning we're at $421,148 – up $10,002 for the month, which is all we ever plan on as this is a portfolio that's aimed to make about 20-30% annually, mainly by collecting dividends.  

When we first started back on October 25th, 2019, we made the mistake of over-extending early on and the March crash hit us hard and the portfolio was down almost 50% so we transferred $100,000 from the STP (which is what the hedges are for, of course) to the Dividend Portfolio (which was originally $100,000) and we pretty much doubled down on everything at the bottom.  That is why we are up 110% after two years and not the planned 50% but, going forward – we're not at all planning to repeat that performance so $10,000 a month is right on track for us. 

Even that is too much as we're supposed to be making 30% of $200,000, not $400,000.  We are almost half cash now and we can deploy a bit more capital – I just wanted to ride out the correction (still in progress) before making the same mistake we did in 2019.  

  • GILD – Up 50% already and not worried about them, depsite the recent dip.
  • VIAC – This symbol is broken at the moment as they are changing it to something relating to Paramount, either PARA or PARAA, apparently.    Either way, our net entry is $25.65, so we're not at all worried.  
  • ET – We expect to be called away at $28,000 but, for now, we're well-protected and collecting dividends.  
  • KHC – Just had great earnings and we're in the money already.  

  • LYB – On track.
  • MO – On track.
  • NLY – Back at our $7 target, happy to be assigned more shares at net $7.25 so nothing to worry about.   We came in in April at $8.63 and we aggressively sold the $10 puts because we wanted to have some nice gains if they did pop but the net $7.25 entry was no problem against the fairly small amount we started with.  NLY pays an 0.88 dividend (12%) and we are always happy to buy more when it's on sale.   Let's take this opportunity to buy back the short $7 calls – as they are already up 75% with a year to go.  

  • T – The only reason we don't have more is because they are doing a stock split and it will be messy but I'd be thrilled to own 2,000 more shares at these prices.  
  • TWO – Another big-paying REIT and we already sold a lot of puts.  REITs are simply out of favor as people are afraid of rising rates but that's why we only pick REITs with great management teams who know how to navigate shifting Fed policy.   There's no point to the short $7 calls so let's buy them back and see if we get a pop for a better sale.  

  • VTRS – Right on track. 
  • DOW – Over our target already.  Pays a nice $2.80 dividend against our net $41 entry.
  • FRO – Finally taking off again.  I couldn't understand why people were not backing the tanker companies as they are fully booked and in shortages.  That's why we bought back the short calls and got aggressive.  Very happy about that now.  

PETS – Another one we got aggressive on but still waiting for them to pop.  .

That was easy!  It's a very simple portfolio and the maintennance moves are pretty much automatic – just taking advantage of the dips to be a bit more bullish but no major changes overall.  And, of course, we're in it for the dividends – profits on the underlying stocks are a nice bonus but the real point of this portfolio is to pay back what we put in every 6-8 years and then we double it and, if on schedule, it's $200,000 in 2020 and $400,000 in 2028 and $800,000 in 2036 and $1.6M in 2044 and $3.2M in 2052 at which point, the dividends alone should be over $200,000 per year (our starting investment) and THAT is how you set up a retirement plan!

 

 

IN PROGRESS

 

 


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  1. Good Morning!


  2. SPWR jan24  15 calls filled for 6.25 


  3. Comment content omitted because it is too long.


  4. Good morning! 

    I'm going to keep adding portfolios to the post above as I finish them – trying to get the last 3 done today as it's a holiday weekend in the US (President's Day), where we honor Donald Trump.  

    Still no improvement on our bounce charts so we're still watching and waiting for something to resolve itself but, as you see in the Earnings Portfolio above – I'm leaning towards more hedging – not less.  

    Gold hit $1,900 – we'll see if it pops over.  

     

    /SI is lagging but shame on us for not going long at $22 (I think we did but only briefly).  If /GC does pop $1,900 then /SI can be played bullish above $24 with VERY TIGHT STOPS BELOW.

    If the market is worried about Ukraine – why is oil still $90?

        

    You're going to have to suffer through a lot of reading today – I need to think about all these cross-currents.

       

     



  5. SPWR/Bert – Very nice.  $4.75 was the lowest on 2/3 but mostly they stay over $5.  They were $20 on 11/3.  

    Claims of firing along the tense front line separating the two sides came as Western officials said Moscow continued to mass troops along the border of its smaller neighbor. 6 min read

    U.S. stock futures declined after Western officials said they weren’t seeing a de-escalation on the Ukrainian border, despite Moscow’s claims of troop withdrawals. 3 min read

    Gosh, and they promised to pull back.  Liars!  

    The U.S. became the top LNG exporter for the first time during December as falling natural-gas supplies from Russia and Ukraine tensions boosted energy prices in Europe.9 6 min read

    Investors are scrambling to get better data about worker pay, satisfaction and quit rates as mass resignations hit corporate bottom lines.7 6 min read

    Americans Want to Travel and Are Eager to Splurge, Companies Say

    The Ghost Condos of NYC’s Financial District

     


  6. What about Shopify in earnings portfolio.  I think it’s down to 30pe.  Strong company with real earnings and revenues.  


  7. Phil,

    My belated thanks for your thoughts yesterday on CROX. Given the positive 4Q numbers – which didn't reflect the HEYDUDE acquisition - the 7 pt drop yesterday followed by the 6 pt drop (so far) today is perplexing but then again "The market can remain irrational…". Your '24 65 put sale makes more sense than my June 80 put sale.


  8. Morning. CAKE nice bump after decent earnings. 




  9. COVID cases plummet all across the U.S.



  10. Alaska Airlines announces $49 flight subscription service


  11. VIAC/Phil  Seems that VIAC is no more .. options replaced by PARA symbol but can't find charts or info .. Paramount symbol is PGRE -  general confusion?


  12. SHOP/Nom – It's just not the kind of play we'd make.  I'm buying it for 30x hoping it gets to 40x?  We don't know how much these stocks have been boosted by the pandemic or how much if it will fade out as we get into whatever phase this is.  I don't think SHOP is unjustly down – I think it's closer to it's proper valuation (and still best-case).  

    CROX/8800 – I feel more comfortable at $65.  When something changes and a large investor decides to get out – it can take them a while to unwind and pressure stays on the stock.  CROX turns 2M shares a day, so $200M and they have a $5.2Bn valuation so, if 10% of the people want out, it will take them a week to unwind, at least.  That's part of the logic of the 5% Rule – it let's us see when that pressure is rising or falling. 

    CAKE/Jeddah – There's a line every time you go and the clients are not really price-sensitive as it's usually the most expensive place at the mall anyway.  The kind of people paying $5 a slice for cheesecake don't notice when the burgers go up $1.  

    Why Is Cheesecake Factory So Expensive? (Top 12 Reasons)

    Wow, did I say $5/slice? 

    Whole Cheesecakes and Specialty Cakes

    10 Inch Original $51.95
    10 Inch Fresh Strawberry $63.95
    10 Inch Celebration Cheesecake $62.95
    10 Inch Pineapple Upside-Down Cheesecake $62.95
    10 Inch Caramel Apple Cheesecake $62.95
    10 Inch Very Cherry Ghirardelli® Chocolate Cheesecake $62.95

    Holy crap! 

    Anyway, I've always liked them because I like their strategy of taking spots in upscale malls, usually next to the movies and they appeal to the high-end clients, who don't want to eat in the food court or the Friday's kind of place all these malls have.  They only have 300 restaurants so years of growth ahead and they carefully test out other concepts each year – so there's the potential for a profitable spin-off as well.  Here's my most recent table-banging session on them:  Submitted on 2022/01/19 at 10:25 am

    Still good for a new trade at net $4,500 on the $60,000 spread that's $22,500 in the money.  How ridiculous not to be in this trade!  

    CAKE Short Put 2024 19-JAN 45.00 PUT [CAKE @ $42.53 $1.66] -15 10/29/2021 (701) $-20,775 $13.85 $-2.15 $-12.32     $11.70 - $3,225 15.5% $-17,550
    CAKE Long Call 2024 19-JAN 35.00 CALL [CAKE @ $42.53 $1.66] 30 10/29/2021 (701) $39,000 $13.00 $0.40     $13.40 $0.50 $1,200 3.1% $40,200
    CAKE Short Call 2024 19-JAN 55.00 CALL [CAKE @ $42.53 $1.66] -30 10/29/2021 (701) $-16,200 $5.40 $0.65     $6.05 $0.35 $-1,950 -12.0% $-18,150

    VIAC/Wing – It takes a while for those changes to filter through.  So annoying.  




  13. Great play on Crox yesterday. Thank God only entered with 4 options 2.2 k in the sand.


  14. Got the Dividend portfolio done (above), very much on schedule!  

    CROX/Yodi – As long as they actually stop falling it will be great. 

    Gold holding $1,900, /SI $23.86


  15. COX Possible a parachute will help


  16. 3M down to 150. 10% more to go for the March 2020 low, but outside that blip, a 5 yr low. 


  17. Down we go:

    Ukraine Blames Pro-Russia Separatists for Kindergarten Shelling Damage

     

     
     
     

    0:00 / 0:57

     
     
    0:26
     
     
     
     

     

    Ukraine Blames Pro-Russia Separatists for Kindergarten Shelling Damage

    Russian-backed separatists and authorities in Kyiv traded accusations over cease-fire violations in eastern Ukraine as Western governments said Moscow continued to mass troops on Ukraine’s borders. The Ukrainian army said a kindergarten and a school in Ukrainian-held towns were hit by mortar shells.430 5 min read

    Join WSJ’s Executive Washington Editor Jerry Seib, Moscow Bureau Chief Ann Simmons and Chief Foreign-Affairs Correspondent Yaroslav Trofimov as they discuss the latest developments.

    Yes, clearly they don't let him get away with enough crap and stocks don't just manipulate themselves:

    Lawyers for the electric-car maker say the regulator hasn’t distributed a $40 million fine from a 2018 settlement to harmed shareholders.11324 min ago 4 min read

    The average rate for a 30-year fixed-rate loan was the highest since May 2019. 2 min read

    The increase of up to 32 cents for a cup comes after the U.S. coffee giant reported slower sales in China and faced a nationalist backlash over a separate issue. 5 min read


  18. You know, obviously, when you put that many soccer balls next to each other – they are going to explode…


  19. Future is Not Yet Portfolio Update:  It used to be called the Future is Now Portfolio but we're down to $162,982 and that's close to $100,000 off our highs as these stocks, more than any others, have suffered from the market pullback.  We were at $202,419 on Jan 20th so down $39,437 for the month and while up 63% is pretty good for 2 years (12/12/19) – it's just not worth it if you can't even beat the Dividend Portfolio.  

    Most of the loss is coming from COIN.  In fact, all of the month's losses are from COIN  and I still like COIN so tricky.  THO has been a big disappointment too and I still like them so I guess we'll ride it out but very, very disappointed that we didn't take 150% and run when we had the chance.  Greed kills.   Actually, not sticking with value stocks is what killed us here so lesson learned – stick with what I believe in!  

    • NAK – Always a gamble and a big one under Biden.  There will be no approval until Republicans are back in charge as we have to bring Alaskan salmon to the brink of extinction to build this mine.  Northern Dynasty Minerals: Years Of Court Battles Likely Upcoming  It's a $1,730 lottery ticket.
    • RWLK – These guys I have great hope for long-term.  Earnings are next week but last Q was up 162% at 1.97M but, at this stage, it's all a matter of when the orders ship – it's the growth trend that matters.  They are still losing about $3M/Q but have plenty of money ($91M) and this stuff actually helps people get out of wheel chairs.  If the portfolio weren't down, I'd buy more.  

    • SOFI – We just added these.  
    • CIEN – Miles over target and we can cash out the $30/45 spread for $13,475 so let's do that and leave the short puts.  

    • COIN – This one is killing us.  They are down with BitCoin but it's like CME going down with commodities – some impact to the business but they are a trading platform, not the commodity itself.  Fortunately, we only have 10 longs (we bought back the short calls) and we can roll the 10 2024 $250 calls at $50.35 to the 2024 $180 calls at $72 for net $21.65 ($21,650) and we'll cover at some point to get that back.  

    • COWN – Just had great earnings and we're aggressively long on these after buying back the short calls. 
    • CRSP – How is this not the future?  Early stages and this one is underperforming but no changes on a 2-year time-frame.  There's no real revenues or profits – this is pure speculation but the technology is amazing.

    • DAL – A little slow but on track.
    • ERJ – Also slow but on track.
    • F – Sorry we didn't get more of these.  

    FF – It annoys me that they pay an 0.24 dividend.  I'd rather the re-invest the cash.  Earnings are March 15th, so we'll have to wait but it's a $329M market cap at $7.36 and they made $46.6M last year so I think these guys are stupidly cheap. 

    • As a dividend play, you could buy the stock for $7.36 and sell the Aug $7.50 puts for $3 and the Aug $7.50 calls for 0.90 to net if for $3.60 with an over 100% profit if called away at $7.50 in 6 months.  If assigned, you have 2x at $5.55/share – so good either way.   In fact, let's add 4,000 of these to the Dividend Portfolio.  

    • GPRO – Everyone is still at home but I expect them to have a good 2 years moving forward.  They are only valued at $1.4Bn at $8.75 but they'll make $200M so 7x earnings is silly for a growing company.  
    • RKT – We picked these up right when mortgages got more expensive and applications dried up but, long-term, they should gain market share.  These guys make $3Bn a year but have a $26Bn valuation at $13.  Earnings are next week so get 'em while you can!   In fact, let's buy back the short 2024 $20 calls for $4,700.  

    • SPWR – We're aggressively long here.  
    • THO – Disappointing start, earnings should be mid-March.  

    • WTRH – Not too bad.  I guess we may as well close the short Jan $4 calls as we're up 92.5% on those so we'll free a slot to sell more if they bounce.  Not much else to do but wait but DoorDash put up huge numbers – so hopefully it's a sector thing.  Earnings are mid-March.

    So not a bad group, just falling on hard times – especially COIN but these are 2-year trades with 23 months to go.


  20. FF – Did you mean sell the Aug $10 Puts for $3?


    • FF/Daveo – I misread that line.  In the LTP, on Future Fuel, if we sell the $10 puts for $3 we net in for $7 and not $4.50 but we can live with that so let's make that our put-side sale.  

  21. Butterfly Portfolio Update:  And then, sometimes your gambles pay off!  $1,521,704 is up $165,342 since our Jan 21st review, so we've bounced back from our December loss ($35,000) and then some.  The Butterfly portfolio is all about selling put and call premium and, depsite the chaos, the S&P is EXACTLY at the same place today (4,400) as it was on Jan 21st (last expiration), and nothing could be better for our Butterfly Portfolio, where we sell all the premium we can to the suckers who think they know if the market will go up or down.  

    The key to a Butterfly play is we find stocks that have very strong fundamentals but are generally range-bound.  We then take a long-term bullish position and, while we wait for the market to realize it's undervalued, we sell puts and calls against it – betting it goes nowhere.  If we are right about the stock and it goes up or stays flat – we make a ton of money selling short calls and puts and whatever we make on the long spread is a bonus.  

    • AAPL – Huge gain on this one but our $480,000 spread is still only net $370,000 on the $120/150s, less $76,800 on the shorts so net net $293,200 means $186,800 of upside potential and that's in 12 months, not 24.  We have oodles of cash to move to 2024 eventually as well, which is what we do every year as this spread stared out at about 1/4 of this size and it just kept doing well and we just kept re-investing.  Just those short April puts generated $86,000 and we have 3 more quarters to sell!  

    • AMZN – We just covered by selling May $3,300 calls for $33,000 and, so far, it looks like our timing was good.   We're kind of agnostic – we just roll the losing side and sell new ones on the expired side until we strike the middle and win on both ends at once.  Doesn't take genius – just persistence.  

    • BDX – Very well behaved in the channel so, on track.  This one is brand new and we paid net $7,650 for the spread and we sold over $12,500 worth of put and calls in the first Q but that's included in the net.   After this, the next sale drops our basis to $0 (if all goes well) and the next 6 quarters will be profit – possibly $72,000.  That's what I mean by saying the $50,000 we may make on the spread is just a bonus – we're in this for the premium sales.  

    DIS – My bad, I did not log in this adjustment from last week:

    • Now we look to see if it's worth covering again and, since we can get $4.50 for the DIS April $160 calls – it would be foolish not to sell 20 of those for $9,000 and we'll also sell 30 of the 2023 $180 calls for $16 ($48,000) and PRESTO, we've locked in $57,000 of our $70,000 gains and still left ourselves in great position to sell more calls if it weakens or roll our short Aprils higher if it doesn't.

    • F – We had a $3,600 loss on the April $20s last month but now we're up $8,880, having made an excellent cover.  I don't think we'll race back to $20 so I don't wish to pay $2,700 to buy them back so, like last month, we'll just patiently wait.  We can sell 40 of the 2024 $15 puts for $2.85 ($11,400) and that's nothing to sneeze at and it also helps cover the short calls, so let's do that.  We can also spend $2 ($20,000) to roll the 100 2024 $20 calls at $3.50 to 100 2024 $15 calls at $5.50.  We're picking up $50,000 of position for $20,000 and we're dropping $25,000 in the money doing it.  Widening the spread means we can sell more calls for income later – so the money will come back.

    • GNW – We bought this when it was more volatile.  Now the June $4.50 puts are only 0.35 – hardly worth selling 20 for $700.  It's a $10,000 spread that's on track at net $2,775 and we don't need the money or margin so it's been taking up space while we wait.  

    • GOLD – We're aggressively long here too – fortunately.  
    • IMAX – Right on track.

    • KO – Blasted higher on us but, fortunately, we only sold 15 short calls and we sold them for $4.40, so no real damage but let's buy them back and see how far we get before re-covering.

    • MJ – We're finally ahead of the game.  Although I can't see hitting $25 by Jan, we may as well buy back the 100 short Jan $25 calls for $3,500 so we have room to sell other calls.  Then we'll give it a month and see where things stand.  We already sold $5,250 worth of April calls so no pressure.  

    • UL – A new one!  Too early to tell but we paid net $3,525 and sold $1,150 worth of May calls to start and that used about 100 of 700 days so 6 more sales is a good profit – regardless of what happens to the rest.  

    • WBA – Coming back down again but I love them.  I want to roll the 25 Jan (2023) $50 calls at $3.90 to 25 (more) 2024 $40 calls at $10.50 for net $6.60 ($16,500).  We will clearly make that up with an extra year of short call sales (in larger quantities). 

    • WHR – We were worried about the short $230 calls but all good now.  Let's buy those back and put ourselves more bullish off the $200 line.  


  22. Wow, indexes are sucking, aren't they?  

    I think Blinken is a bad name for a guy who's got to look Putin in the eye….

    Russia rusia serious GIF on GIFER - by Stonehammer


  23. I love this guy!

    Putin Says Hackers Are Like Artists "Who Wake Up in the Morning in a Good  Mood and Start Painting"


  24. So our market theory is holding up – any bad news that increases the number of people trying to sell simply can't find buyers and the market drops like a rock tied to a bigger rock.


  25. GOLD/Phil Am in mid-roll with GOLD into '24s, so now have:

    30 '23 $15 calls ($7)

    30 '24 $15 calls ($8.20)

    -10 '23 $20 puts ($3.2)

    Both longs have done well with the pop in GOLD so am thinking maybe keep the two spreads active for this run and sell '23 and '24 $25 calls against both rather than just selling the '23s and covering the '24s. Any thoughts?

    Thx!