Sold a whole bunch of positions, as my favored seasonal indicator went bearish (Nasdaq NH-NL 5/17 day moving average, here: http://stockcharts.com/h-sc/ui?s=$NAHL&p=D&yr=0&mn=1&dy=0&id=p65895739383 ). I also closed the lower-strike option of my bear put spread.
Sold to close:
LLL Jan 2013 $60 calls @ $22.20
GSK Jan 2012 $40 calls @ $4.12
JNJ Jan 2012 $50 calls @ $15.37
MDT Jan 2012 $35 calls @ $8.11
AAPL Jan 2012 $260 calls @ $98.00
AAPL Jan 2012 $230 calls @ $124.00
AAPL Jan 2012 $180 calls @ $171.00
Bought to close:
IWM Aug 20 2011 $72 puts @ $1.50
AAPL July 2011 $330 puts @ $7.90
I'm now in 50% investable cash. I have one written put position, on TDSC. I have one bought put position, the higher-strike part of my bear put spread hedge on IWM. I also currently own calls on OXM, HEK, GILD, and AAPL.
Showing posts with label MDT. Show all posts
Showing posts with label MDT. Show all posts
Monday, February 28, 2011
Closed calls on MDT, GOOG
Bought-to-close MDT Jan 21 2012 $25 calls for $14.84
Bought-to-close GOOG Jan 21 2012 $510 calls for $126.20
Bought-to-close GOOG Jan 21 2012 $530 calls for $111.70
These are long calls I had purchased earlier. They still have ten months to expiration. I'm closing them and selling the calls to a new buyer. This provides a good example of why I like LEAP options.
I bought the $510 calls on GOOG in May 2010 for $91 per share. I'm now selling them for $126.20 per share, with ten months remaining until expiration. GOOG is currently selling around $613 per share. I could have exercised the calls, bought GOOG for $510, and resold it for $613--a $12 per share profit [ sales price - purchase price - premium = $613 - 510 - 91 = $12 ]. Instead, I sold the calls to a new buyer for a $35.20 per share profit [ sales price - purchase price = $126.20 - 91 = $35.20 ].
Here's the math for all three transactions:
GOOG $510 calls, exercising calls:
[ sales price - purchase price - premium = $613 - 510 - 91 = $12 ]
GOOG $510 calls, reselling calls:
[ sales price - purchase price = $126.20 - 91 = $35.20 ]
GOOG $530 calls, exercising calls:
[ sales price - purchase price - premium = $613 - 530 - 88 = - 5 ] <---NOTE THE LOSS
GOOG $530 calls, reselling calls:
[ sales price - purchase price = $111.70 - 88 = $23.70 ]
MDT $25 calls, exercising calls:
[ sales price - purchase price - premium = $40 - 25 - 8 = $7 ]
MDT $25 calls, reselling calls:
[ sales price - purchase price = $14.84 - 8 = $6.84 ]
This is a good example of why it's important to go through the math for each possible outcome of your options. For the GOOG $510 calls, a profitable trade was made more profitable by reselling the calls. In the GOOG $530 calls, a loss was avoided by reselling the calls. For the MDT $25, I would have made slightly more money ($0.16 per share) by exercising the calls. In that case, I chose to resell the calls because I'm already exposed to MDT through $35 calls I own and I'm no longer confident enough in the stock to justify that much exposure.
In each case, the calls began as multi-year LEAPs, and I've owned them for enough time to see if my investment thesis will play out. Longer expiration periods for calls tend to give more time to see results, are more flexible in providing a variety of profit-taking options, and are often reasonably priced for what you get.
Bought-to-close GOOG Jan 21 2012 $510 calls for $126.20
Bought-to-close GOOG Jan 21 2012 $530 calls for $111.70
These are long calls I had purchased earlier. They still have ten months to expiration. I'm closing them and selling the calls to a new buyer. This provides a good example of why I like LEAP options.
I bought the $510 calls on GOOG in May 2010 for $91 per share. I'm now selling them for $126.20 per share, with ten months remaining until expiration. GOOG is currently selling around $613 per share. I could have exercised the calls, bought GOOG for $510, and resold it for $613--a $12 per share profit [ sales price - purchase price - premium = $613 - 510 - 91 = $12 ]. Instead, I sold the calls to a new buyer for a $35.20 per share profit [ sales price - purchase price = $126.20 - 91 = $35.20 ].
Here's the math for all three transactions:
GOOG $510 calls, exercising calls:
[ sales price - purchase price - premium = $613 - 510 - 91 = $12 ]
GOOG $510 calls, reselling calls:
[ sales price - purchase price = $126.20 - 91 = $35.20 ]
GOOG $530 calls, exercising calls:
[ sales price - purchase price - premium = $613 - 530 - 88 = - 5 ] <---NOTE THE LOSS
GOOG $530 calls, reselling calls:
[ sales price - purchase price = $111.70 - 88 = $23.70 ]
MDT $25 calls, exercising calls:
[ sales price - purchase price - premium = $40 - 25 - 8 = $7 ]
MDT $25 calls, reselling calls:
[ sales price - purchase price = $14.84 - 8 = $6.84 ]
This is a good example of why it's important to go through the math for each possible outcome of your options. For the GOOG $510 calls, a profitable trade was made more profitable by reselling the calls. In the GOOG $530 calls, a loss was avoided by reselling the calls. For the MDT $25, I would have made slightly more money ($0.16 per share) by exercising the calls. In that case, I chose to resell the calls because I'm already exposed to MDT through $35 calls I own and I'm no longer confident enough in the stock to justify that much exposure.
In each case, the calls began as multi-year LEAPs, and I've owned them for enough time to see if my investment thesis will play out. Longer expiration periods for calls tend to give more time to see results, are more flexible in providing a variety of profit-taking options, and are often reasonably priced for what you get.
Thursday, February 24, 2011
Friday, July 16, 2010
MDT, KCI, LNN, INTC options
Bought MDT Jan 2012 $35 strike calls for $6.60
Bought KCI Jan 2012 $30 strike calls for $10.50
Sold LNN Dec 2010 $30 strike puts $2.10.
The July INTC puts I wrote will expire unexercised this weekend.
Bought KCI Jan 2012 $30 strike calls for $10.50
Sold LNN Dec 2010 $30 strike puts $2.10.
The July INTC puts I wrote will expire unexercised this weekend.
Friday, May 7, 2010
MDT, LNN, PG, AAPL, GOOG, GSK, SPY
My goodness, what a week!
On the 28th I closed my outstanding puts on MDT and LNN, for $2.40 and $1.75, respectively.
On the 4th, I bought PG outright for $62 per share. I also bought 2012 calls on AAPL ($54.50 per share, strike @ $260) and GOOG ($91 per share, strike @ $510).
On the 5th, I bought GSK 2012 $40 strike calls for $2.80.
On the 7th, I bought AAPL 2012 $230 strike calls for $58.00. I also sold my GOOG stock (not the calls) because I believe my GOOG calls give me enough exposure to that stock.
Finally, I bought May 22 2010 $105 strike puts on SPY for $1.65. With just two weeks until expiration, that's a pure spec position. After the bizarro world action of the past week, I want a hedge.
On the 28th I closed my outstanding puts on MDT and LNN, for $2.40 and $1.75, respectively.
On the 4th, I bought PG outright for $62 per share. I also bought 2012 calls on AAPL ($54.50 per share, strike @ $260) and GOOG ($91 per share, strike @ $510).
On the 5th, I bought GSK 2012 $40 strike calls for $2.80.
On the 7th, I bought AAPL 2012 $230 strike calls for $58.00. I also sold my GOOG stock (not the calls) because I believe my GOOG calls give me enough exposure to that stock.
Finally, I bought May 22 2010 $105 strike puts on SPY for $1.65. With just two weeks until expiration, that's a pure spec position. After the bizarro world action of the past week, I want a hedge.
Friday, January 15, 2010
Monday, December 21, 2009
Tuesday, October 20, 2009
Bought LNN, EBIX, Wrote MDT puts
I put 3% of my portfolio in LNN at $32, and another 3% in EBIX at $61.64. Sold 2 Jan $36 puts on MDT for $1.70.
Monday, October 19, 2009
October 19, 2009 Options expirations.
The $30 covered calls I sold on AVY expired ITM, so my shares were called away. The stock was trading at $38 today, so someone made money.
The $36 puts I wrote on MDT expired unexercised; I still want the stock, but I'll look to write more puts or buy on dips.
The $36 puts I wrote on MDT expired unexercised; I still want the stock, but I'll look to write more puts or buy on dips.
Tuesday, September 1, 2009
MDT, PCL
Today I put 5% of my portfolio into PCL (Plum Creek Lumber) at $30/share. I chose to buy now because Plum Creek has not participated in the current rally; it's above it's March lows, but is currently trading near its April stock prices. The stock has a 5% yield and I believe lumber and mineral rights are an excellent hedge against inflation.
I also wrote four October $36 puts on MDT, paying $0.85 per share. I had puts on MDT expire un exercised last month; if the stock dips in the next six weeks, I may get it at a desirable price. If not, I'll continue to write puts for it; I want the stock, but not enough to pay $38/share for it.
I also wrote four October $36 puts on MDT, paying $0.85 per share. I had puts on MDT expire un exercised last month; if the stock dips in the next six weeks, I may get it at a desirable price. If not, I'll continue to write puts for it; I want the stock, but not enough to pay $38/share for it.
Monday, August 24, 2009
Aug 22 2009 Options expirations
I had several options positions expire over the weekend. Puts I wrote on PCL (Plum Creek Lumber) MDT (Medtronic) and MOS (Mosaic) all expired un-exercised. That capital is now free to be used in new trades. I plan to sit on it for a while until the market dips.
Shares of SLV were put to me; I immediately used these to write Jan2010 calls at a $17 strike price. I was paid $0.50 a share for these, for a total of $450 income on the 9 contracts. If un-exercised, my return will be 2.9% for the trade or 0.6% per month--negligible compared to puts, but acceptable for a covered call since the risk is significantly less. As detailed below, SLV is in my portfolio only to generate income via puts and calls.
I had written covered calls against VZ (Verizon) and MCK (McKesson). VZ was called away, fairly close to my $31 strike price. My MCK calls, however, had a strike of $45--when my shares were called away, I could have sold them on the open market for $56!
That's the risk of covered calls; you may not make as much money as you could have. My initial buy price on MCK was $23.70, so when it was at $44, I was happy to agree to sell it for $45. I never dreamed the price would increase so dramatically in less than two months.
Shares of SLV were put to me; I immediately used these to write Jan2010 calls at a $17 strike price. I was paid $0.50 a share for these, for a total of $450 income on the 9 contracts. If un-exercised, my return will be 2.9% for the trade or 0.6% per month--negligible compared to puts, but acceptable for a covered call since the risk is significantly less. As detailed below, SLV is in my portfolio only to generate income via puts and calls.
I had written covered calls against VZ (Verizon) and MCK (McKesson). VZ was called away, fairly close to my $31 strike price. My MCK calls, however, had a strike of $45--when my shares were called away, I could have sold them on the open market for $56!
That's the risk of covered calls; you may not make as much money as you could have. My initial buy price on MCK was $23.70, so when it was at $44, I was happy to agree to sell it for $45. I never dreamed the price would increase so dramatically in less than two months.
Thursday, July 2, 2009
Writing puts
Today I wrote the following puts:
Medtronics (MDT): 3 contracts at $1.55/share, strike price of $34, expiring in August (51 days)
Precision Castparts (PCP): 1 contract at $3.10/share, strike price of $65, expiring in September (79 days)
Income from MDT: 300 shares * $1.55/share = $465
Return from MDT: ($1.55/$34)*100 = 4.5% over 51 days.
Income from PCP: 100 shares * $3.10/share = $3.10
Return from PCP: ($3.10/$65)*100 = 4.8% over 51 days.
These percentage returns are about what I aim for for shorter term puts (two to three months until expiration).
For longer term puts (four to six months) I aim for at least 7% returns.
Medtronics (MDT): 3 contracts at $1.55/share, strike price of $34, expiring in August (51 days)
Precision Castparts (PCP): 1 contract at $3.10/share, strike price of $65, expiring in September (79 days)
Income from MDT: 300 shares * $1.55/share = $465
Return from MDT: ($1.55/$34)*100 = 4.5% over 51 days.
Income from PCP: 100 shares * $3.10/share = $3.10
Return from PCP: ($3.10/$65)*100 = 4.8% over 51 days.
These percentage returns are about what I aim for for shorter term puts (two to three months until expiration).
For longer term puts (four to six months) I aim for at least 7% returns.
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