New Trades for Feb 2010:
Sell to Open EEM Feb 38 Put $1.28 1 $128
Sell to Open XLF Feb 14 Put $0.56 3 $168
Sell to Open FXI Feb 39 Put $1.26 1 $126
Sell to Open XLF Feb 15 Call $0.40 3 $120 to clear away the assigned 300 XLF shares
Sell to Open GDX Feb 40 Put $1.20 1 $120
Sell to Open SPY Feb 103 Put $1.35 1 $135
Sell UNG $10.53 300 shares $3159
Sell to Open EWZ Feb 66 Put $1.35 1 $135
Old Trades:
Sell to Open XLF Dec 15 Put $0.72 3 $216 assigned 300 shares
Sell to Open FXI Dec 41 Put $1.25 1 $125 expired worthless
Sell to Open IYR Dec 38 Put $1.25 1 $125 expired worthless
Sell to Open FXI Dec 41 Put $1.20 1 $120 expired worthless
Sell to Open IWM Dec 57 Put $1.22 1 $122 expired worthless
Sell to Open UNG Dec 11 Put $0.55 3 $165 assigned 300 shares
Sell to Open GDX Dec 43 Put $1.35 1 $135 expired worthless
Sell to Open EEM Dec 39 Put $1.28 1 $128 expired worthless
Sell to Open EWZ Dec 64 Put $1.30 1 $130 expired worthless
Sell to Open SPY Dec 99 Put $1.32 1 $132 expired worthless
Sell to Open XLE Dec 55 Put $1.20 1 $120 expired worthless
Dec cash in/out: -$3709 (due to assignment of XLF and UNG)
With the premium collect for XLF in Oct 2009, the assignment this month in Dec 2009 is just a breakeven case. No true loss here really.
ReplyDeleteWith the premium collect for UNG in Oct 2009 and the current price of UNG at about 10.6, the assignment this month in Dec 2009 can actually result in a small profit if we do not want to hold the shares.
Watch out this page and see how we unfold the play shortly. :)
I just started following your blog and was wondering why you don't close out any trades that have gone against you buy let's say 100%? (if you collected $100, close it out when it gets to $100 debit).
ReplyDeleteMM
hi MM,
ReplyDeletei do not close out trades, taking the fact that i am selling put options on ETFs instead of stocks. Had it been stocks or futures, commodities options, i will definitely close out before my positions got threatened. its dangerous!
i am not so worried about ETFs and a lot of times, the underlying actually bounced off and end up having the options expired worthless. :)
on top of that, taking into account the fact that i am already selling quite below the current price of the underlying, giving me with sufficient tolerance for the price movement.
hope that helps. :)
thank you.
uktank
uktank,
ReplyDeleteSince you are doing so with ETFs I suppose that removes a significant amount of the downside risk.
When you show a loss it looks pretty significant. Is that your actual loss, or an accounting loss?
Let me restate, is Decembers loss of -$3844 the actual amount of money that you have lost due to having to ETFs "put" to you (which is due to the difference between the strike price and current price)? Or are you accounting for all of the amount as represented by the strike price?
MM
hi MM,
ReplyDeleteok let me address the "loss" thing. when i get an option being assigned to me, meaning i have to fork out say $3000 of cash to buy those shares, this $3000 will appear as -$3000 in the Total, symbolising a "loss". in other words, this total simply means the cash transaction in my account then.
hope this clarifies. :)
so the -$3844 in Dec is simply the difference in the money i forked out to buy those shares and those premium which i pocketed from selling all the other options.
thank you once again. and feel free to let me know if you have further questions.
uktank
uktank,
ReplyDeleteOkay, that makes sense. And when you sell those shares you book the entire amount as a gain.
It does make your account look like it has more loss and or gains than it really has. The profit/loss swings are wider this way.
Great blog,
MM
thank you! :)
ReplyDeletehope you enjoy my blog.
rgds
uktank
Hi UKtank,
ReplyDeleteGreat blog.
Yes I agree with MM - of course up to you as it's your blog, but it looks like you're being hard on yourself showing that cash loss when in reality you now own the assigned underlying asset instead - albeit a lesser value
Maybe put CASH: xxx and ASSETS: yyy shrs or something which wouldn't looks like such a hit on your account equity.
Might be easier on the psyche ;)
Anyways, keep up the good work!
Cheers
Steve
hi MM and Steve,
ReplyDeleteyes i do agree with both of you and have change it to cash in/out per month. hopefully that is clear enough for the reader. :)
as indicated, its due to assignment. those with some options trading knowledge would be able to understand what it meant. the only worry is peoplel without the option knowledge might misunderstood. just hope they would raise the questions when in doubt.
and thank you for your suggestions.
cheers!
uktank
Hi uktank,
ReplyDeleteCould you do me a favor and add in ( ) the date in which you sold the contract. I see that you sold 5 or so contracts at or very near the December expiration but since have opened up some more positions.
I don't check back all that often so it would be nice to review those new trades and look at the charts on those dates to see everything as it was.
Regards,
MM
sure MM. will put in dates for my future trades.
ReplyDeletergds
uktank