Sep 6 2017

My Trader – s Journal #covered #call #selling, #naked #put #selling, #stocks, #options, #covered #calls, #naked #puts, #$indu, #djia, #s #p, #qqqq


My single expiring option for May finished in the money, so I decided to roll it out to July before taking the assignment.

While IWM was trading at $136.43, I bought to close one IWM May $138 naked put and sold one IWM July $138 naked put and received $283.60 after paying $2.20 in commission for the two legs of the calendar spread. IWM ended up closing at $136.00 on the day and which meant I did a little better than I would ve if I had waited until the very last second of the trading day.

I posted my video of the trade here :

For the first time in the 10 years that I ve been writing My Trader s Journal, I made a trade on Analog Devices ($ADI). While ADI was trading at $80.60, I sold one ADI July $80 naked put for $3.40 and received $339.75. I think the downside risk to ADI is no lower than $75 and probably not that low.

I detailed my trades in this YouTube video posted here :

Volatility is so low right now that it s barely worth selling options. The NASDAQ Composite hit a record high again and I opted to sell a ratio spread on QQQ with the belief that QQQ will move slightly lower before expiration in August. If I m wrong and QQQ climbs further, I still make a few bucks since I received a tiny credit for this ratio spread. If I m right and QQQ ends exactly at $133 at expiration, I ll gain more than $1,200.

While QQQ was trading at $138.26, I bought two QQQ August $139 puts and sold four QQQ August $133 puts to pay for the long puts. I received $8.33 after paying $3.67 in commission.

You can see my commentary here along with my QQQ chart QQQ Ratio Spread

My account had another month of gains, but I was still far under-invested and missed out on what could ve been more. Maybe I ll get off the sidelines a little more on the next dip. I missed a good opportunity while the VIX moved higher a couple of weeks ago, but keep waiting for a bigger drop.

I ended April with a Net Liquidation Value (NLV) of $100,970.02 and a Net Asset Value (NAV) of $100,996.36 according to Interactive Brokers (IB) after finishing March with an NLV of $100,480.73. I had a gain of $489.29 (

0.5%) on paper for April and no realized gains since I only sold a new naked put in April, but didn t close any positions. I received no in dividends in April since I m still not long shares of anything yet. Quicken reported that I have an account value of $100,968.88, which is the same as what IB says I have after adding in the $27.48 in accrued interest that IB is crediting me for.

I m 50.59% invested in this account, 9.74% more than the end of March and still a lot less than I should be. As I said last month, I am waiting on a correction, but will have to take some risk at

Filed under: Finance – 13 Apr 2017

While UWM was trading at $109.90, I sold one UWM July $100 naked put for $4.30 and received $429.75 after paying $0.25 in commission.

I just realized I didn t address in the video why I sold the July expiration. The nearer-term expirations didn t offer enough of a premium to make it worth the trade and the longer-term expirations had too much time risk for my goals. By using the July expiration, I was able to sell far out of the money and get a good annualized return.

Here s the link to the video for my process:

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The chart below shows the daily prices for the past six months on SPY, the SPDR ETF that tracks the S P 500 Index, after closing the week at $235.20, on April 7, 2017.

The S P 500 has edged lower since peaking at the beginning of March, but the chart shows it hasn t rolled over yet. The two trend lines that mark SPY s higher lows converged at the intraday low on March 27, but both still maintain support from further lows. The longest trend line drawn below marks the trend of higher lows. The area between these sets of lines is called the trading channel and projects where SPY is likely to trade, until it breaks outside of either barrier.

Other technical indicators can help predict future movement too. The moving averages indicate directional patterns that help to highlight changes in sentiment. An index that falls below its moving average tends to fall further below it until a new catalyst or technical barrier influences its direction. I used the 20, 50, and 200-day moving averages in this

Comments Off on SPY Chart April 7, 2017

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