Today was a strong bullish day in the market. This is a welcomed change in direction considering the bearish trend the markets are on. The question here is, is this an official change in direction or just a bounce before further declines? I believe this is the bounce that will turn into an uptrend.
I wasn't necessarily expecting a strong move today, but as I was expecting something I entered an order today to buy 5 December call options of CitiGroup Inc. (C) at the $4 strike price. I believe that at these prices there has been sufficient pull back for it to begin growing again. This order I put in was executed successfully and I followed it with an order to sell after gaining 25% net profit after commissions. That order was entered for the day only and I am going to be entering daily orders to sell so that I am able to set them with a qualifier of All-or-None.
The reason why I am putting in a sell order for a 25% gain is that I am trying to capture the gains that I believe that I can be certain of if it moves up strongly. If it gets to the point where I can start expecting greater gains I will eventually start putting in railing stop orders so that I can follow the slogan of "letting my losers loose, and letting my winners run." That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
Thursday, May 27, 2010
Monday, May 24, 2010
Portfolio Update: Premium Pocketed and Exercise in Patience
The Friday just past was option expiration for May options. I mention that because the Call option I sold against my iShares Silver Trust ETF position (SLV) expired for my benefit. The result of that is the pocketing of a little cash and the retention of 100 shares of SLV. Despite last week's meltdown, I am still positive. Should I hold on to my position or sell? Good question.
That is it for the pocketed premium portion, now for the patience exercise. Both my optionable position of Capital Product Partners, LP (CPLP) and the Call option I purchased is in the negative. To hold on to the Call option was irresponsible of me, but fortunately there are 4 months until expiration. I am going to take the opinion that it will level off and reverse before the 4 months is out. I am comfortable with my decision to hold onto the stock because the dividend payout is good for the earnings they make. I am not expecting large growth from this stock.
Unfortunately, the CPLP Call option wasn't the only irresponsible move I made. I also am still holding on to a Call option for the United States Natural Gas ETF (UNG). I am currently only down part of the commission cost. Fortunately, I have 5 months until expiration. I am going to continue to hold and be patient for this correction to return back up.
I am, however, going to make an adjustment to my expectations. I am going to recalculate my exits for smaller gains on these options. I am thinking somewhere around 25% plus the cost of round trip commissions. I shouldn't expect too strong of a rebound after this correction.
That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
That is it for the pocketed premium portion, now for the patience exercise. Both my optionable position of Capital Product Partners, LP (CPLP) and the Call option I purchased is in the negative. To hold on to the Call option was irresponsible of me, but fortunately there are 4 months until expiration. I am going to take the opinion that it will level off and reverse before the 4 months is out. I am comfortable with my decision to hold onto the stock because the dividend payout is good for the earnings they make. I am not expecting large growth from this stock.
Unfortunately, the CPLP Call option wasn't the only irresponsible move I made. I also am still holding on to a Call option for the United States Natural Gas ETF (UNG). I am currently only down part of the commission cost. Fortunately, I have 5 months until expiration. I am going to continue to hold and be patient for this correction to return back up.
I am, however, going to make an adjustment to my expectations. I am going to recalculate my exits for smaller gains on these options. I am thinking somewhere around 25% plus the cost of round trip commissions. I shouldn't expect too strong of a rebound after this correction.
That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
Thursday, May 20, 2010
Portfolio Update: Partially Executed Option Trade
On Tuesday, May 18th, I had a STC (Sell-To-Close) option trade executed on my United States Natural Gas ETF (UNG) Call options. Unfortunately, due to a small form entry error on my part, the order was only partially executed. What I neglected to do, or was unable to do, was set it as an 'all or none' order. So as a result only one of my two call options sold and the actual profit taken on that trade is slightly less half of what I was expecting. At least until the other option sells.
In regards to that other Call option, since the option doesn't expire until October I have plenty of time to wait. To take advantage of that time, I bumped up the sell price to try and make up for the fact that this second sale will result in an extra commission cost. Sadly, the markets are not doing well at this time, and a lot of patience will be required. I don't see any current reason to believe that Natural Gas should decline drastically before recovering. If anything, I may buy a few Call options on UNG with expiration's further out.
A negative of my current strategy is that it does require a great deal of patience still. One example is that I just recently purchased a Call option on Capital Product Partners, LP (CPLP). Currently my stocks and Call option have taken a hit in there value. I am thinking the news about the oil spill in the Gulf of Mexico is adversely affecting it for little actual reason, purely out of sympathy because CPLP deals in the marine freight transportation of oil and gas. Fundamentally CPLP is strong with a fair price and earnings that are more than four times the dividend that it pays out to it's investors. Because of these good marks I will continue to hold the stock. I will be holding on to the Call option because I have until September before it expires, I believe the stock and the option will recover before then, and if I am right I will be able to sell the option for the planned 50% profit.
On another note, I appear to be ITM (in-the-money) with the Call option I sold against my shares of the iShares Silver Trust ETF (SLV). The ETF has pulled back over a dollar from the option strike price that I sold. This is totally unexpected by me, and a little disappointing since I was hoping it would hold above $18.50 at least until after expiration. Unless there is serious need for silver before the close on Friday, it looks like I will be keeping both the premium as well as the shares. That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
In regards to that other Call option, since the option doesn't expire until October I have plenty of time to wait. To take advantage of that time, I bumped up the sell price to try and make up for the fact that this second sale will result in an extra commission cost. Sadly, the markets are not doing well at this time, and a lot of patience will be required. I don't see any current reason to believe that Natural Gas should decline drastically before recovering. If anything, I may buy a few Call options on UNG with expiration's further out.
A negative of my current strategy is that it does require a great deal of patience still. One example is that I just recently purchased a Call option on Capital Product Partners, LP (CPLP). Currently my stocks and Call option have taken a hit in there value. I am thinking the news about the oil spill in the Gulf of Mexico is adversely affecting it for little actual reason, purely out of sympathy because CPLP deals in the marine freight transportation of oil and gas. Fundamentally CPLP is strong with a fair price and earnings that are more than four times the dividend that it pays out to it's investors. Because of these good marks I will continue to hold the stock. I will be holding on to the Call option because I have until September before it expires, I believe the stock and the option will recover before then, and if I am right I will be able to sell the option for the planned 50% profit.
On another note, I appear to be ITM (in-the-money) with the Call option I sold against my shares of the iShares Silver Trust ETF (SLV). The ETF has pulled back over a dollar from the option strike price that I sold. This is totally unexpected by me, and a little disappointing since I was hoping it would hold above $18.50 at least until after expiration. Unless there is serious need for silver before the close on Friday, it looks like I will be keeping both the premium as well as the shares. That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
Tuesday, May 11, 2010
Portfolio Update, Orders Entered and Executed
I haven't posted since the 5th of May. Since then I have seen some promising behavior. To start, Capital Product Partners, LP (CPLP) has been stabilizing. The momentum indicators (Stochastic and MACD) are starting to turn back up, so I believe it shouldn't be going down any more in the near future. At the same time, it is looking uncertain that the Call option I bought on it will benefit from growth of the underlying stock as much as I initially estimated. As a result, I entered a Sell-To-Close (STC) order for what I initially thought was 50% profit. After seeing another order STC, that I will mention below, I am realizing that my math was a little bit off in reference to how commission affects the profit and will be making a slight adjustment.
My next portfolio position to mention is that of Brocade Communications Sys, Inc. (BRCD). The three Call options I purchased on it were hit pretty hard last week. However, I believed that my position value would go back up. As a result I made a STC order to capture as much profit on them as I could the next time it went up . Unfortunately, I didn't expect it to go up so quickly and so soon. As a result it executed the trigger price of the order today and I am now out of the position. This is also the position I was talking about earlier when discussing CPLP. As a result of a miscalculation of the commission cost, I am pocketing less than the intended 50% profit on the trade. I should have calculated 150% on the base cost I got in for and then added the round-trip commission costs on top of that value, and then divided that sum by the number of contract shares. That then would have given me the price to sell.
My next portfolio position to mention is that of the United States Natural Gas Fund ETF (UNG). The two Call options I purchased on it were also hit hard last week. I also believe that the value will go up eventually. As a result, I made a STC order to capture a reasonable 50% profit on the position. Unfortunately, the calculation for this order was also off, so I will be increasing it along with the one for CPLP.
Finally, the iShares Silver Trust ETF (SLV) peaked above the $19 strike price for the Call option I sold against my shares. As a result, I am less confident that I will be holding on to both the premium for the call option I sold as well as my shares of SLV. Although I am less confident, I am not concerned, because I will collect a nice profit on the transfer of the shares. That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
My next portfolio position to mention is that of Brocade Communications Sys, Inc. (BRCD). The three Call options I purchased on it were hit pretty hard last week. However, I believed that my position value would go back up. As a result I made a STC order to capture as much profit on them as I could the next time it went up . Unfortunately, I didn't expect it to go up so quickly and so soon. As a result it executed the trigger price of the order today and I am now out of the position. This is also the position I was talking about earlier when discussing CPLP. As a result of a miscalculation of the commission cost, I am pocketing less than the intended 50% profit on the trade. I should have calculated 150% on the base cost I got in for and then added the round-trip commission costs on top of that value, and then divided that sum by the number of contract shares. That then would have given me the price to sell.
My next portfolio position to mention is that of the United States Natural Gas Fund ETF (UNG). The two Call options I purchased on it were also hit hard last week. I also believe that the value will go up eventually. As a result, I made a STC order to capture a reasonable 50% profit on the position. Unfortunately, the calculation for this order was also off, so I will be increasing it along with the one for CPLP.
Finally, the iShares Silver Trust ETF (SLV) peaked above the $19 strike price for the Call option I sold against my shares. As a result, I am less confident that I will be holding on to both the premium for the call option I sold as well as my shares of SLV. Although I am less confident, I am not concerned, because I will collect a nice profit on the transfer of the shares. That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
Wednesday, May 5, 2010
Portfolio Update, New Option Purchase, Current Positions and Opinion
On Monday, May 3rd 2010, I bought two call options on the United States Natural Gas ETF (UNG). The purchase was for the the $8 strike price to expire in October of 2010. The cost to me was only $114.25. My expectation is that the ETF will make it to $9 before October and that I will be able to sell it for about twice it's value. I expect this because the technicals on UNG are reading extremely over sold with climbing momentum. There is also a long way to go, and doubt in the market, so I will need all 5 months of time to see it through.
In my last post I voiced some concern that I might have gotten into a Capital Product Partners, LP call option too soon. Currently it appears my concerns were valid. The fortunate thing is that I have a lot of time left in my call option on CPLP that I can afford to wait and see what happens. I am currently in for a $195.60 and will have until September 2010 to wait to see if the market will take a turn for the better.
According to news coverage, it is expected that this Friday will have some promising information in the Jobs Report which should suggest that the recession is finally turning around. According to the same news coverage, most of this pull back for the past few days has a lot to do with the oil spill in the Gulf of Mexico. Additional news coverage has reported that British Petroleum (BP) is doing a responsible job of cleaning up the mess. If that is the case, and Friday is suppose to be promising, then now is the time to be investing and averaging down stock positions, so I am feeling comfortable about all that I have done to set my self up.
Currently I am collecting dividends on CPLP and EVEP (EV Energy Partners, LP). Both of them also have profit, although they have both taken a deep dip. I currently hold profit on a Brocade Communications Sys Inc call option and the underlying stock seems to only be taking a breather from it's already building momentum. I perceive that after the Jobs report all three of these will see a turn around.
One last thing is my position in the iShares Silver Trust ETF (SLV). Completely unexpected, it has been taking a beating. I completely expected for it to rise up and through the strike price of the Call Option I sold against it at the $19 strike price for this May 2010 expiration. Buy because of the devaluation it has received I am feeling more confident that SLV will continue to be held below the strike price and I will keep both my shares and the premium I collected on the option. We will see by the 21st of May. That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
In my last post I voiced some concern that I might have gotten into a Capital Product Partners, LP call option too soon. Currently it appears my concerns were valid. The fortunate thing is that I have a lot of time left in my call option on CPLP that I can afford to wait and see what happens. I am currently in for a $195.60 and will have until September 2010 to wait to see if the market will take a turn for the better.
According to news coverage, it is expected that this Friday will have some promising information in the Jobs Report which should suggest that the recession is finally turning around. According to the same news coverage, most of this pull back for the past few days has a lot to do with the oil spill in the Gulf of Mexico. Additional news coverage has reported that British Petroleum (BP) is doing a responsible job of cleaning up the mess. If that is the case, and Friday is suppose to be promising, then now is the time to be investing and averaging down stock positions, so I am feeling comfortable about all that I have done to set my self up.
Currently I am collecting dividends on CPLP and EVEP (EV Energy Partners, LP). Both of them also have profit, although they have both taken a deep dip. I currently hold profit on a Brocade Communications Sys Inc call option and the underlying stock seems to only be taking a breather from it's already building momentum. I perceive that after the Jobs report all three of these will see a turn around.
One last thing is my position in the iShares Silver Trust ETF (SLV). Completely unexpected, it has been taking a beating. I completely expected for it to rise up and through the strike price of the Call Option I sold against it at the $19 strike price for this May 2010 expiration. Buy because of the devaluation it has received I am feeling more confident that SLV will continue to be held below the strike price and I will keep both my shares and the premium I collected on the option. We will see by the 21st of May. That is my opinion, you can take it or leave it. Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
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