Investing Journal - T2S

T

Took2Summit

Hello,

I have a portion of my portfolio I would like to track in this journal. This is a somewhat new method for me and I have been trading the method with real dollars for about 3 months now. I will use all real dollar values as a fraction of my actual holdings. I intend to update at least weekly, but hopefully more often if I feel there is something worth posting.

Strategy:
My main strategy for this journal is going to be holding strong, established companies, with dividends ideally but not required. I will be selling monthly calls on all my holdings and will be swing trading the calls, while holding the investments themselves long-term.

I will not update the value of each holding, instead I will update the calls sold and total portfolio value.

Everytime I close/open a call position I will update here.

Current Portfolio: $23,793 (I started this portion of my portfolio with $20,000)
MSFT Aug 20 $27
M Aug 20 $30
NKE Aug 20 $92.50
 
How do you generally decide what the strike price on the calls should be?

Do you have a standard rule or does it vary based on the stock?
And you usually keep these rolling -- sell another just after the prior expires?

I've been considering selling monthly calls on my MSFT stock -- picking a strike price at what I feel is at the top of the range for the month (which for august would probably be the same 27 that you have)
 
Hey yeah I pretty much decide strike price based on what I feel is a fair value of the stock. Obviously all my holdings I expect to increase in value. For instance on the microsoft I thought 27.50 was a possibility after earnings. I sold the 27s for $0.61 which represents a max earning potential of 27.61 on MSFT.

I generally hold my underlying long-term and swing trade my options, if the option ever becomes worth 10-15% of what I sold it for, I buy it back and sell the next month (or current month again if this price drop happened quick enough) based on my fair value price of the underlying. I don't ever let an option expire in the money unless I want to close my position in the stock due to keeping long-term gains going on the underlying. IE I buy it back Friday the day before expiration regardless of where the stock is or what the option is worth, and then roll out the next month.
 
Start of week (wednesday): $23,793
End of week: $24,201 (+1.75%)
Trades: 0
Current Covered Calls:
MSFT Aug 27
M Aug 30
NKE Aug 92.50

Pretty good short week out there (started this journal on Wednesday, 3 day week of results). Almost all my trades have gone pretty well so far this month. We're only 1 week into the new option month, so still some action left out there I'm sure :P

MSFT did pretty much exactly as I suspected and got a slight bounce up to 27.50 after earnings.

M has been very strong lately and I think I may have my strike a bit too low on this one at this point, however I don't generally readjust strikes on the upside mid month, mainly on the downside. I'm gonna let this one run out even though it's forming a very nice cup and handle. The only reason I'm not readjusting the strike here is because the handle is trending up rather then down, and I generally look for a cup and handle with the handle trending slowly down before the big spike up. I suspect there's some downside potential for this next week, we will see.

NKE has been super boring, thus the 92.50, still another week or so of trading for this one to come back down to the 21/50 DMA I suspect.

The main thing I'm looking at is the VIX, I thought it was going to spike up to 30 there but it reversed and is back down to the 17s. The VIX dropping to the 17s is the main reason my account has been doing decent this week.

Should be a fun week next week as earnings season wraps up!
 
Since I'm somewhat new to this strategy (about 3 months now) I'd like some opinions from people if anyone is experienced. Right now I have the option to make this trade:

I sold the MSFT 27 Aug 20 for $0.60 when MSFT was at $26.50

MSFT is now at $27.90 and I can buy my call back for $1.10

I could then sell the 28 Aug 20 for $0.50.

Opinions/thoughts on this strategy?
 
ended up keeping MSFT how it was. IV is acting very strange today with the VIX up just a bit.

My MSFT common stock is up $0.18 and my MSFT call is up $0.23 today. Not quite sure how that one works out considering earnings have already happened.

M and NKE are both starting to show more weakness then I would like, especially NKE. I'd really like to see NKE stay above it's close on the gap up, which is only like 89.90 which we are very close to seeing at these levels. I should also add volume has been pathetic on NKE.
 
Start of week: $24,201
End of week: $23,712 (-2.02%)
Trades: 0
Current Covered Calls:
MSFT Aug 27
M Aug 30
NKE Aug 92.50

This week looks worse then it really was. The VIX was killing my account as it kept shooting up everyday. I thought we were due for a VIX spike so here it is I guess, now the question is how high will it go? One day after earnings already happened my MSFT stock was up $0.10 and my call was up $0.20 which killed my results this week.

M is doing the pullback I had expected, also before earnings. Will need to make a decision whether I want to hold this through earnings or not, I likely will at this point.

NKE was breaking down pretty badly this week and then found some support finally. The ship is stabilizing and I can pull in a decent week next week.

Hopefully the VIX can simmer down next week and give me some more value in my covered calls, but if not they will expire worthless on option expiration day whether the VIX is at 100 or 10 :P

Considering next month trying to do some weekly calls on MSFT and see how that goes. I can make more decisions on whether to do ITM, ATM, or OTM on a week to week basis based on my technical analysis. I think there can be more value in those and depending on how it goes I may have to drop NKE and M for some equities with weekly options.

A couple on my watch list include C, AMZN, V, KO, LVS, T, X, and XOM. Would also consider the SPY or QQQ but unfortunately the margin laws have recently changed and you can't margin on dollars in ETF's until you have held them for 30 days. May do that one in my roth where I can't margin anyways.

As always comments/suggestions/feedback are more then welcome
 
Repair mode continues

Just bought back M 30 Aug 20 call for $0.22

Keeping MSFT as is for now.

Deciding whether to sell new strikes on NKE and M or just dump them, will likely dump M as I don't want to hold it through earnings anyways.
 
Sold M 26 Aug 20 for $1.07 including commissions
Sold NKE 82.50 Aug 20 for $2.00 including commissions.

Have a couple months to makeup the damage just dealt in 1 week. Staying positive :)
 
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