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I have had so-so results with this strategy. I never seem to be able to get the prices Teddi does to make it worth my while! Just off hand,the last few I looked at, I might have been able to squeeze 10 cents out before commissions – not worth it.
Teddi – does it make sense to try to buy the stock a few days before the ex-div date on a dip? I understand (me in particular), that I don’t want to tie up a lot of capital, but it seems the only way I can make it work.
Also, a tip I was given if you look at the extrinsic value of the corresponding call strike you are looking to sell, and if it is worth more than the dividend, then it is most likely the stock will not be called away. I am not sure I understand the relationship yet, but thought I would pass that along.
Thanks,
ValerieFrom a different perspective, I am making all my trades in an IRA – so I don’t have anything but cash secured puts. I have been selling a handful of Put Spreads on a regular basis with $20K max of my capital.
Since the start of this challenge, this is by far my stellar performer this year – another email could explain those that haven’t been…
I have a realized gain of just over $8K! I close early now that I am with a brokerage with no closing costs, and redeploy on dips. I keep the long Puts open (as Teddi does), until selling against them doesn’t make sense. In addition, I rarely have used the entire allocation of $20K. In fact, right now I may be using no more than $5K of buying power. Looking for the next dip.
No complaints here – thanks Teddi!
Thanks for sharing some VERY SPECIAL moments about your personal life and the beautiful photos – it is a side we don’t discuss much here and I am glad I popped in today.
Your daughter is stunning and very proud of her mom – you are an inspiration!
I kind of think LOL, that once you get this in your “blood” (at least this is my thoughts currently), that I will never stop keeping up with the markets and invest to some extent – I will be the grouchy one asking where my internet connection is wherever I end up!
As for the guilt? Why?? It is a skill that takes time, patience, and experience just like any other type of profession. I am feeling the pain of my new “profession” but I am also confident that I am on the right track. I have volumes of stuff I have written in the past couple of years and wouldn’t change it for anything.
However, at the end of the day, all the technical indicators I learned, all the different option strategies and their weird names, plus the countless hours spent spinning my wheels, couldn’t have made me keep doing with this without how I have accomplished everything else in my life – perseverance – plus some hard earned capital in this case:(.
Once again, thanks Amy for sharing your personal side and also thanks for being on this forum when I pop in – I always look for you!
Valerie
Teddi,
This strategy would never be something I would consider – if it weren’t for you! Sometimes my shares (of whatever stock ) get called away and sometimes not – but I normally have managed to get out of the stock out with a small profit.Having said this, I learned from another source where Super Charge Buy Write is ever used – not a strategy at all but if you look at the Extrinsic value of the Put side when you write the CC, and if it is more than the dividend, then the chances of being exercised out of your shares are slim to none.
To me, it’s just a quicker way of deciding if I want to enter the trade or not.
Have a great night
Yes Amy – I am old enough to remember Father Knows Best:)
Teddi- before I even looked this morning, I had come up with what you just said – I have to stay more neutral – well program myself to think that way at a minimum…
Thanks and looking forward to neutrality!
So far so good on FB trades – thx Teddi. I am replicating your trades (for the most part) but with 1/5 of your size or $20K max. capital at any given time. Had a great earnings trade that helped to boost profits but can’t get overconfident here – this market is incredible but is it sustainable?
Who knows but if I hadn’t have been bearish for so long, my portfolio would be in better shape!
Closed yesterday @ 5 cents. Good trade – thx Teddi.
Since I am on the forum this morning, I will offer my opinion.
After your premium collected, how far away are you from the current stock price?
Do you want to own TGT at where you own it?I don’t really like holding stock so if this happens to me, I will write calls that will allow me to collect a premium at a strike that will cover my cost basis.
Hope this helps – if you are way underwater, then I look for calls that have a great probility of expiring OTM but not on all the shares – save 100 or so in case TGT goes up!
Hi Tom and 5YearPlan,
That is good pricing and I have also hear good things about Fidelity from a trading buddy.If you do not know about TastyWorks or TastyTrade,it is more than just a brokerage – it’s an experience! They broadcast on the internet all day during regular market open hours and the research is incredible. As I said before, it is mostly what Teddi says but in a completely different approach but Teddi is a keeper for me!
And best of all, the internet TV is free whether you are part of their brokerage or not. They also have hundreds of videos available on various option strategies. Their commissions (no negotiating – same regardless of your account size) are:
1- $1.00 per options contract (no base rate). If you are trading 10 contracts or less, it would be a better rate – if not, maybe not for you.
2- $4.95 flat rate for equities trades.
3- $0 to close any trade.To me, #3 is the best since it gives me the flexibility to close early and take profits in a somewhat uncertain environment at the moment.
I highly recommend checking them out – tastyworks.com is where you can check out what they offer.
Teddi – not trying to put in a plug for someone else, but since you are not a brokerage, I didn’t think you would mind.
Regards,
ValerieI might as well close and redeploy the capital, but the commissions are the issue.
I am about ready to make a broker change again and it is by far the best commissions I have found.
Ironically, once you finally get the options world, all those that are experienced, are doing more or less the same – premium sellers. I found Teddi first and doubt I would ever stop being a member.
I am on my way to Tastyworks – the best pricing in the industry from what I have found.
Hi Teddi and all,
I am in! FB is one of the few stocks that has been kind to me :).Starting the year alot smaller so I will be doing 10 contracts but a little more aggressive on the short put. So I have the 125/120 @ $0.61.
Depending upon what happens this year, my strikes may get more in alignment with Teddi’s. But with earnings coming up and the premiums are good, so far this is a winner but will hang in until I reach maybe 50% of profit – if there seems to be a change in the sentiment after the inauguruation.
Thanks Teddi – what I just wrote, I wouldn’t have any idea what it meant before I found your site :)
Valerie
Geez – I hope we see an uptrend since I thought I had “it”! I bought calls back in Sept @ $38, for a net cost of T at $40.42. Well all was doing great, since I wrote calls, puts, etc. until the recent downturn.
Now I am a little profitable but where did the great profit go? Well there is always the expiry which is not until next week and I also have several Put sells out there.
Little by little, it gets better – I guess!
Thx Teddi – I really didn’t understand any of this until I found you. You are so right – I don’t “puppet trade” you anymore at least.
I did and got into one of your reverse ICs one time – I was clueless about how to handle it!
So any time before I place a trade if there is something I know I am not sure about, I don’t bother – no need to pay more tuition.
This rally? If I hadn’t have been bearish for so long, I would be much better off. Reading your Market Breadth is critical to me now as well as the VIX/SPX correlation.
Very happy Tedii – nice paycheck today :)
I am also using ABT to help with my BMY repair if that helps..
Hope that understands more of what I said and thanks for your words of encouragement – I am commited as I said before! Like many, I was completely unprepared for how the market reacted after the election. For the first 2 hours it was great, then everything that wasn’t supposed to happen did!
Thanks Teddi – I will not give up! I am in this for good and I will do whatever it takes.
I completely understand you philosophies and utilize many of them. If I would have understood the restrictions in an IRA I would have put only the bare minimum (matching employer contributions) into tax deferred accounts years ago! What’s done is done but I can’t believe that FINRA dictates how I can utilize my hard earned money!
New week new trading opportunities.
Hi Amy,
I appreciate your recap of Teddi’s trades. It seems the more I know the less I know…I still spend several hours every weekend reviewing my trades, learning more, and determined that I will make it happen!
Those of us who are net options sellers, haven’t had “easy” opportunities. Where’s the premium?
I think/hope that’s about to change – looks like the VIX may be rising – hope so. I have been premature on being a bear – not good, but with the RUT that I hope cannot continue to rise forever, I stared picking up the inverse ETF for the RUT – TZA.
Just adding an ETF to Teddi’s Market direction portfolio? Hope Teddi reads this and offers her opinion – It’s slowly starting to make a few $$..
Thx Amy – I hope I can and I will. But right now, I have nothing but if/when I do, I will share.
Hey we all have to help each other in this “career” we have chosen. It is one of the biggest challenges I have taken on in my life. All I know, is there is no going back to having someone else manage our money – empowerment here.
All is going to be fine here- just needed a slight rise to if necessary, take the shares but with premium collected? Sell them if nothing else for a small profit – at least at the moment, that is where I am BUT it could all change next week as we know…
Teddi,
I went aggressively after this one but thanks to you, I am not concerned. If I have under the water ITMs they were rolled, sometimes as a debit (no naked puts here) and then put on a trade that will offset the debit paid on a Call Spread without using more capital.It sure has taken me a while but I am a better investor (in my own way), thanks to you!
Valerie
Hi Amy,
Join the club on repairs… but congrats on the on the Energy Sector.For what it’s worth, while I don’t have any “inside” info, it’s all public, I do know a bit about the big pharma industry (probably not the right terminology) since I have been working as a consultant doing Quality and Regulatory Controls for Medical Device approvals for both the FDA and the EU.
All that means is I know what it takes, in particular, get a medical device approved for marketing. It’s more or less although a little more complex, for the biopharma companies with new drugs.
Well they all disgust me with their consumer targeted ads but that beside the issue – it’s hard to trade them IMHO.
Whenever I see volatility risng in medical supplier big name company, I dig further. LLY comes to mind lately. It seemed like a bullish trade based on my research but NO! It wasn’t and I am so glad I didn’t bite.
MDT is another who I have consulted for in the past – actually, as a consultant, I would work for them any day over JNJ – just my 2 cents knowing about the industry.
I am trying to figure out a way to use this knowledge and make it profitable for all but I need more data before I will be close to having the answers.
I am, as Teddi does, only looking at the established companies – not the up and coming “losers”.
My experience is why I have work at times – when I deal with small companies, typcially they do not have a clue what it takes to get their product to market.
Have a good night!
Looks like it going to be a good one though!
Hi All,
Maybe my approach/experience as loyal member here for I think around 2 years is different.It’s great that Teddi is implementing new tools, but if you don’t understand the methodolgy from the start, don’t think it’s going to be your “way to weath”!
The best and greatest thing I have learned here is how to adapt what Teddi does and apply it to my circumstances. Now that I have learned the stuff that only “geeks” would learn, she knows it but makes it easier. Options rule and being a net put seller is the key- no doubt in my mind. I just took this then applied how volatile an underlying is to get better premiums but sometimes – it doesn’t matter.
However,there is no substitute for your own due diligence. I have paid my tuition to be able to say this!
So for you who expect deadlines, just remember what Teddi is doing – trying to teach all of us how to be better investors. She cares and that is her only motivation IMHO.
Teddi – correct me if I am wrong, but since I have invited you to come to my country :), your only motivation is to change, among others, the stupid advice that FP’s love to sell – mutual funds! The worst investment ever. Most of them have no idea what options are- I have been down that road.
I am grateful for all you have done for me and there are days when I am trading and realize – wait! What does Teddi have to say? I didn’t do my normal routine that always puts me in check.
Buenos Noches aquí en Panama,
ValerieThis is my first time active trading during and after a presidential election. However, I am not sure that would have made a difference!
Since I don’t live in the US, getting the full picture of what is going on is hard but not sure I want to know anyway.
Regardless, I now understand, just from the market, what our presidential elect supports and what currently is out of favor.
DUK, which has had high volatility for a bit, is definitely not a favorite. I did put in a very low bid on the stock for a Super Charge Buy Write and was filled today to my surprise. I am about even last time I checked so hopefully I can make a few $$ and have the stock called away. Plan to wait until closer to ex-div on Nov 16 to see the share price rises a bit before selling ITM covered calls.