Patrick's Rants



1/6/2013

YHOO Recap

Filed under: Money,Stocks — site admin @ 11:37 am

YHOO has taken off like a shot recently, trading up around $20/sh. I’ve been in and out of YHOO for the past couple of years, but if the price keeps running up it could be time to look for lower cost stocks. I currently have the April 15p originally sold for $0.95 that are trading pretty darn close to my commission free nickle price so I have a good til cancel order in to do just that. The are a few reasons to move to a lower cost stock. First, to get a decent premium on the $15p I have to sell way out in time. The stock being around $20, we get two types of people willing to buy the $15p: Long term hedgers (and who is long term?) or long term speculators. Second, I have about $1500 to work with. There will be minimal price movement on a really far out $15p and the downside protection is not that great – I’m only protected down to maybe $14 on YHOO before I’m underwater. Granted, that’s a $6/30% move from here, but still.

So when the options get bought back or expire (I’m betting on buying to close) I’ll start to look for something in the $5/sh range.


Do your own research, this is what I’m doing and is for educational and entertainment purposes only

10/8/2012

YHOO Final Score

Filed under: Money,Stocks — site admin @ 6:49 am

For some reason I was too busy to post last week when I bought back my YHOO 16.00 puts for $0.30. With commissions, the position was closed at $40.76. I opened this for $89.23 after commissions. Profit percentage just on the options is 118%, but to look at this properly one should calculate from the cash required to open the position: in the IRA, it’s 1600. That works out to 3% for three months. Not great, unless you compare it to just a straight savings account and approximately 12%/yr is not too bad.

I did immediately open a new position of the $15 April put. It’s a little far out, but I was trying to reduce my overall amount at risk, $1600 to $1500, and it was April that offered close to $1.00. Sold for $0.95. It’s a similar return to the 16 puts just closed out if it expires worthless.


I’m doing this in my own account, this is for entertainment and educational purposes only. I’m not recommending YHOO or any other stock. You have to make your own decisions

2/28/2012

YHOO Today

Filed under: Money,Stocks — site admin @ 10:48 am

It’s a snow day and I’m watching my order to sell YHOO calls way too closely. I had an order in to sell the Jul 16 calls for 1.00. I adjusted that order to .85 today. Then I canceled that order and went for actual premium and sold the Jul 15c for 1.24. I will look to close this position below .30 if the price gets there with more than 30 days on the contract. So, three possibles: buy back the calls for less than .30 (depending on time remaining), let the calls expire – watching the time – get exercised at 15.00.


Disclosure: I’m long YHOO and writing covered calls

2/22/2012

YHOO Plunge

Filed under: Money,Stocks — site admin @ 7:54 am

YHOO has been hit pretty hard over the last week or so and I closed my Apr 15.00 calls at .60. Net of commissions I’m at a 96.76% cash rate of return on the options. If we look at rate of return based on the shares of YHOO held I have to pick a point to measure from. I bought these shares at 14.98, the calls were sold on 15.00, I’ve sold several calls already, etc. For simplicity sake the net premium collected is $0.68 per share. On the $15 strike that ends up being 4.5%. For just under 1 month. I don’t mind doing that a few times per year.

1/26/2012

YHOO Covered Calls

Filed under: Money,Stocks — site admin @ 9:43 pm

I closed out my Yahoo April $16.00 calls @ $0.87. I sold the calls for $1.50. Net of commissions I’m at a 42% gain. I’ve entered a new limit order to sell the April $15.00 call for $1.50. If that sells, an order to buy it back at $.75 gets entered. Before commissions that order is a 100% return if it gets entered and then closed out.
There are (at least) three potential outcomes if the April 15c sells:

  1. The second order never executes and I keep the $1.50
  2. The second order executes and closes me out at 100% gain (minus commissions)
  3. YHOO closes above $15.00 and I have to deliver the shares. (And I keep the $1.50)
    If this happens I will look to sell the $13.00 or $14.00 puts.

Disclosure: I’m long YHOO, selling covered calls.

12/12/2011

YHOO

Filed under: Money,Stocks — site admin @ 7:43 pm

Turned the Dec 17 call, closing it out for $.05. I sold the calls for $.80 minus commissions – puts me around a 1200% return. I like the 17.00 calls since the 6 month high for YHOO is 16.79. I’m looking ahead to see what I can collect for January 17.50 calls, thinking I might be able to get around $.60. The other option is to sell the next strike price up, 16.00, free up some cash and start selling the 14.00 puts.


Disclaimer: Yeah, I like YHOO right now, but this is not investment advice.

11/8/2011

YHOO 2 Turns

Filed under: Money,Stocks — site admin @ 7:15 pm

Bought the Nov 17 calls back @ .18 on 11/07. Rolled forward to Dec 17 calls @ .80 on 11/08. If YHOO keeps rolling the way it is I could do this every month.

1/26/2013

GTE

Filed under: Money,Stocks — site admin @ 2:26 pm

I traded GTE a few times in 2009 grabbing around 9% on one trade and 11% on the other – at nearly half the price it is now. Yesterday I just added 300 shares to my account at $4.99 and looking for the pop to $5.78, that’s almost a 16% move before commissions and if it happens fairly quickly, a much better use of cash than waiting for 5% returns on YHOO options.


This is my account and what I’m doing – if you follow me we might both lose money. šŸ™‚ Remember, do your own research.

1/16/2013

Nickle Back

Filed under: Money,Stocks — site admin @ 8:06 pm

Closed YHOO 15p today for $5.02. I sold the puts for $84.23 after commissions in October. Profit on the trade is $79.21. Straight calculations put the profit at 1577.89% but that doesn’t reflect the $1500.00 cash to secure the puts. That’s a simple 5.3% for just over three months, or annualized it’s 19.32%. Not too bad. As I previously wrote about YHOO, I’m looking to move onto or into something different to free up my $1,500 or better use it.


This is what I’m doing, posted for entertainment and educational purposes only. Do your own research.

7/23/2012

Stock Round Up

Filed under: Money,Stocks — site admin @ 8:58 pm

My calls on YHOO were in the money on Friday so I had 100 shares assigned away from me at $15.00. Looking back I bought these on 6/23/11 for $14.98 so before commissions it’s $0.02 profit… but the last calls I sold netted $113.23 after commission and the calls sold over this year netted $347.04. For the year that’s 23%, for the single sale it’s 7.5% in 5 months. There are several ways I could measure the profit percentage, but these two are probably the most reflective of owning YHOO for the year.

This morning I changed my strategy just a bit from my original plan and sold the YHOO Oct 16.00 calls for $1.00. While I do look at daily gyrations, I try not to let them cloud my judgement too much. I’m looking to close the position somewhere around $0.30 which will require a bump in YHOO’s price or a serious decline in time value or both. If YHOO recovers from this total market decline I might be able to close out of this position quickly, if not I will have to wait until October to see if YHOO trades around $15.70 with no time value on the options. This is a bit riskier plan as I am selling these puts in the money by $0.40, but most of the risk is in the decaying time value.


This is what Iā€™m doing in my own account and is for illustrative and educational purposes only. Do your own research.

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