Posts Tagged ‘IRA’

September Expiration Results

I took a conservative approach for September and wrote only deep in-the-money calls on stocks that had the edge I was looking for at entry.  Here are the percentage gains for my five trades that are called out today:

TSL –     3.68% 

WFR  -  3.31%

VMW  - 3.10%

CCJ  -   2.67%

CMI  -   2.2%

Total Average Gain = 2.99%

Since I was not fully invested for September, my actual virtual portfolio gained about 1.2%.  I took early positions for October as I found good entry points that worked for my strategy.  I am tracking my virtual portfolio compared to the SPY, which moved from 107.53 at August close to 107.88 yesterday, which is a .32% move upward. So even partially invested I beat the S&P 500 by nearly 1 percent.   

At some point I will calculate how much I would have made if I had bought the stocks outright and I’m guessing it would have been a very nice number since they all went up and every stock but CCJ was up more than 5 percent.  My checkpoints should make for a great stock picking system for straight stock purchases to hold for 3 to 6 weeks.  So why don’t I do that instead?  My trading style is very cautious.  I hate to lose money.  I have tried other systems and found myself vulnerable to buying high and selling low, or getting too nervous and shaken out of positions early, when I could have made a profit with patience.  This month I would have had a hard time fighting off all the negativity in the market to even enter positions unless I had a hedged entry with a covered call.  Since I have a master’s in psychology, my world view is that trading success has as much to do with psychology and emotions as it does fundamental and technical analysis.  I have confidence in my system and feel more secure investing when I know I am hedged and can roll into the next month.  I feel like I have taken back control from the market manipulators by selling options to give myself flexibility and a cushion against whatever crazy thing happens out there.

(Click on my user id to go to the website for complete trade updates.  I monitor comments more closely at the site as well.)

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Always Trade with Your Edge

Always Trade with Your Edge

Courtesy of Rev Todd

As I near the first option expiration next Friday during my one year plot to make 3% a month for a year, I know I won’t make 3% the first month and I am OK with that.  I did not fully invest right away and phased in investments as I found stock patterns that fit my philosophy.  After three weeks I am still not fully invested.  I will probably make up ground by October because I have put in a number of positions already that will make more than 3%, so I’m not going to go crazy trying to hit my target every month.  While I want to make money, I’m going to meet that goal by not losing money and not taking unnecessary risk.  I believe I will still meet my overall goal without 3 percent this month by following this simple advice:

Always trade with an edge. 

What is the trading edge when writing monthly covered calls?  I am trying to take advantage of one of the three certainties in life – death, taxes and premium decay on options.  I don’t know what the stock market or the company I invest in will do. I do know with certainty that when I sell an option I will get paid and the premium will drain to zero by the third Friday of the next month.  I sell monthly options because the premium is compressed to a greater degree than LEAPS (long-term) options.  My first edge is very simple, sell premium that allows for 3 percent in profit per month.  Since my current bias is that the market is ranging, I’m playing it safe and writing in-the-money calls that allow for a 5 to 10 percent downside protection, which seems reasonably safe for now.

I never write a covered call on a stock just because of a compelling premium.  My goal is to make a stable income on the stock every month, not to speculate.  High premiums are a sign of high volatility in the stock, which makes the investment more speculative.  I want a high degree of certainty, so I follow some basic rules, which you can see in every trade alert I post.…
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Three Styles of Buy-Writes in an IRA

A whipsawing market can disturb your sleep to the point where you feel like you spent the night sailing around the Cape of Good Hope in a hurricane rather than dreaming about how you will spend your retirement. I batten down the hatches by writing covered calls in my IRA virtual portfolio. Covered calls enhance returns in a range-bound market and make the IRA ship sail a little smoother in choppy wakes caused by the latest CNBC “USS Dome and Gloom” and “USS BuyBuyBuy” sail at your stern. The Education section at Phil’s Stock World (PSW) gives three great strategies on how to buy-write your way to a more peaceful retirement. I suggest you read the details of each of these strategies as you get the chance, but I will provide a brief summary and what I see as the strengths of each style of writing covered calls.

 
Discount Buy-Write
 
This is the backbone strategy at PSW to build a core virtual portfolio. The strategy is to buy a great stock coming off a market bottom and sell a call and put at a strike price that allows for a 20 percent or better discount on the purchase of the stock. Here is a great example from PSW sent to members on July 7.
 
XOM is a good inflation hedge and so beaten down (back to Sept 2008 spike lows, when oil was $40) that I have to include it.  They have a 3.1% dividend of $1.76 with the stock at $57.46 and we can sell the 2012 $55 calls for $9.20 and the 2012 $52.50 puts for $7.35 for a net $40.91/46.71.  That brings the dividend up to 4.3% and you make another 34% if called away at $55 with your worst case being owning 2x XOM at an 18.7% discount to today’s price.
 
The obvious advantage of this strategy is that you can make a decent income even if your stock drops and you get a 15 to 20 percent downside hedge. Even in a huge market drop, that will pay off leaving you greater capital to work with as you build your virtual portfolio back up. Second, these are long-term writes, often 6 to 18 months into the future. If you don’t have time to monitor your virtual portfolio every day or week, this strategy allows peace of mind while vacationing or just living your life. Third, if you are a PSW


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What “the plot” is all about

What “the plot” is all about

Courtesy of Rev. Todd, Rev Todd’s IRA Plot

Business people looking down at man lying on pavement, elevated view

For several years I have been a wandering stock market pilgrim seeking the holy grail of trading. I started with $2500 from a tax rebate and started climbing the volatile active volcano of penny stocks. I barely escaped the lava and moved through a series of gurus. I journeyed through the lands that were infested with gold bugs; flew (and crashed) with the iron condors, traveled with a trading tribe of “turtle traders” until whipsawed unconscious; and flew too near the sun with Icarus-like option traders.  None of these proved to be the holy grail, since I either had too little cash, too little time or too little patience since I work full-time and cannot devote myself to day trading.

In September of 2008 I discovered covered call writing. Once again I took a beating as the market underwent cardiac arrest in the ICU, but I noticed that while mutual funds were down 40-50%, I was “only” down 30% at the bottom and I recovered all my capital by the following February. I could also sleep at night and didn’t have to be glued to the screen. In the 1st quarter of 2009 I had 14 of 14 successful trades, made 15% writing covered calls, and followed that with making 14% in the 2nd quarter. Sounds like the holy grail, right? However, the VIX was at a peak and the premiums were more magnificent than the pearly gates and heavenly streets paved with gold. Then I got greedy. I succumbed to the sirens promising 100% a year and once-in-a-lifetime investments in breakthrough technologies.  I started to lose money again. 
 
I stumbled into PSW a few months ago and the buy-write strategies and hedges made sense to me. I started making money again. I didn’t find a holy grail, a messiah, nirvana, or the Kingdom of God, but I did start getting my daily bread. Oddly enough I make more money by being conservative than by taking risks.
 
So how did “IRA plot” come about? I assure you I am not affiliated with any Irish revolutionary groups, though I did spend a summer in Belfast. I’m talking about the Roth kind of IRAs. I recently took over managing my new wife’s IRA and my mother’s IRA. Not all the strategies at PSW work in IRA accounts. While Interactive Brokers allows me to sell cash covered naked puts, I cannot buy


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Zero Hedge

Eton College Defends Sacking Teacher Over Video On Masculinity

Courtesy of ZeroHedge View original post here.

Authored by Simon Veazey via The Epoch Times,

Amid growing backlash for firing an English teacher over a video on masculinity, Eton College has said that it is “not an issue of freedom of speech.”

Teacher W...



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Phil's Favorites

Is Robinhood Good For Investors?

 

Is Robinhood Good For Investors?

Courtesy of 

If you would prefer to listen to this post rather than read it, click the link below.

Michael Batnick · Is Robinhood Good For Investors?  

“Is Robinhood good for investors?”

I was asked this question on a digi...



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ValueWalk

Rockpals 500W/520WH Portable Power Station - Light, Easy, Reliable, Powerful and Affordable

By Aman Jain. Originally published at ValueWalk.

Gone are the days when people traveled with no electric gadget on a camping trip. Nowadays, a camping trip is invaded with all types of gadgets, be it a smartphone, tablet, water filter, camera, drones, GPS units and more. It is not easy to keep all these gadgets powered up throughout the trip, unless you have a portable power station with you. Along with camping trips, a portable power station could also be of use in case of a road trip, or an extended power outage. So, if you are planning to buy a portable power station and are looking for help, then I suggest going for the Rockpals 500W/520WH Portable Power Station.

Rockpals Portable Power Station – easy to use

Rockpals 500W/520WH Portable ...



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Digital Currencies

Five Reasons Why Bitcoin is Going Up

 

Five Reasons Why Bitcoin is Going Up

Courtesy of 

Call it the “Respectability Rally”…

A few reasons for Bitcoin’s return to the record highs. It’s about $18,500 as of this writing, matching the previous highs from 2017’s original explosion.

Reason one: It’s going up because it’s going up. Don’t scoff, this is the reason most things in the markets happen and then the explanations are called for afterwards. I’m in financial television, I have literally watched this process occur in real-time. The more something moves in a given direction, the more peop...



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Kimble Charting Solutions

Will Silver Price Reversal Bring Another Historic Decline?

Courtesy of Chris Kimble

Precious metals caught lightning in a bottle for the first 7 months of the year, with Gold notching new all-time highs and Silver making to multi-year highs in August. But both have reversed lower since peaking in August and investors should pay attention.

It might be nothing… or it might be something! Especially for Silver, which didn’t follow Gold’s lead in making all-time highs.

Today’s chart is a long-term “monthly” chart of Silver. As you can see, it was hi-yo Silver for the first 7 months ...



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Politics

Mythmakers: The Men Who Created Donald J. Trump

 

Mythmakers: The Men Who Created Donald J. Trump

Mark Burnett, Jeff Zucker, and the Trustwashing of a Fake President

Courtesy of Greg Olear, Prevail, author of Dirty Rubles: An Introduction to Trump/Russia 

...

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Biotech/COVID-19

Oxford-AstraZeneca vaccine is cheaper than Pfizer's and Moderna's and doesn't require supercold temperature

 

Oxford-AstraZeneca vaccine is cheaper than Pfizer's and Moderna's and doesn't require supercold temperature

Now there is a third possible vaccine for fighting the COVID-19 pandemic. Jakub Porzycki/NurPhoto via Getty Images

Courtesy of Sanjay Mishra, Vanderbilt University

The biopharmaceutical company AstraZeneca has released data on what is now the third promising vaccine candidate against COVID-19 – and it has several advantages over those of its competitors, ...



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Chart School

RTT browsing latest..

Courtesy of Read the Ticker

Please review a collection of WWW browsing results. The information here is delayed by a few months, members get the most recent content.



Date Found: Friday, 12 June 2020, 08:06:43 PM

Click for popup. Clear your browser cache if image is not showing.


Comment: Interesting (2)



Date Found: Saturday, 13 June 2020, 12:27:02 AM

Click for popup. Clear your browser cache if image is not showing.


Comment: Recession Forecasts Time Frame



Date Found: Monday, 15 June 2020, 11:07:52 PM

...

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Mapping The Market

COVID-19 Forces More Than Half of Asset Management Firms to Accelerate Adoption of Digital Marketing Technology

By Jacob Wolinsky. Originally published at ValueWalk.

There is no doubt that the use of technology to support client engagement initiatives brings both opportunities and threats but this has been brought into sharp focus this year with the COVID-19 pandemic.

The crisis has brought to the fore the need for firms to enable flexibility in client engagement – the expectation that providers will communicate to clients on their terms, at their speed and frequency and on their preferred channels, is now a given. This is even more critical when clients are experiencing unparalleled anxiety from both market conditions and their own personal circumstances.

...

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The Technical Traders

Adaptive Fibonacci Price Modeling System Suggests Market Peak May Be Near

Courtesy of Technical Traders

Our Adaptive Fibonacci Price Modeling system is suggesting a moderate price peak may be already setting up in the NASDAQ while the Dow Jones, S&P500, and Transportation Index continue to rally beyond the projected Fibonacci Price Expansion Levels.  This indicates that capital may be shifting away from the already lofty Technology sector and into Basic Materials, Financials, Energy, Consumer Staples, Utilities, as well as other sectors.

This type of a structural market shift indicates a move away from speculation and towards Blue Chip returns. It suggests traders and investors are expecting the US consumer to come back strong (or at least hold up the market at...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

TODAY's LIVE webinar on stocks, options and trading strategy is open to all!

Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

This week, we also have a special presentation from Mike Anton of TradeExchange.com. It's a new service that we're excited to be a part of! 

Mike will show off the TradeExchange's new platform which you can try for free.  

...

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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. Contact Ilene to learn about our affiliate and content sharing programs.