My 2013 Option Trades.... part 3

Atticus, el Maestro -

Yes, 'sweet spot' as I used it was subjective. I realize that an option with 15-30 days to expiration is decaying more rapidly than an option with 45-60 days to expiration.

My sweet spot (parameter or hurdle are better descriptors) begins at 60-70 days.

As Forrest Gump said, selling options is like a box of chocolates. Some of us like dark (70% cacoa), and some of us like milk (36%).

www.chocolatesantander.com/landing/
 
Speaking of "sweet spots":
Given the current low VIX environment I'm forced to trade in, I set a goal of having my trades earn in the range of 13 - 19% annualized per trade.
I just checked the last dozen trades initiated for 2013, and they average out to about 16.5%.
Thus, I'm currently in the "sweet spot" of where I want to be for 2013.

If/when the VIX leave the "teens", and enters the 20's or higher, I'll then re-assess the market situation and my % return goal range for the year.
Attempting a higher % return goal than 19%, with such a low VIX environment to work in, would mean lowering the "probability" of actually achieving that goal.
Thus, my current 16.5% annualized return, with it's high probability outcome, is the current "sweet spot" for me.

Of course, that 16.5% return on those dozen trades for 2013, are merely how the trades were initiated.
The only issue that really matters is,... how the trades end.
 
Got a partial fill thus far, on $20 ANV for June.
Credit $0.95
Annualized % return..... 13%.
otm cushion..... 14%

I did my research a while ago, so I don't recall why I'm selecting the stock or strike.
But apparently I think a BE price of $19.05 is reasonable.
And there is some tech support in the $19 - $20 area, per the 5 year chart.
http://finance.yahoo.com/q/bc?s=NUAN&t=2y&l=on&z=l&q=b&c=

This trade is NOT a recomendation.
Just sharing the investment.
Wish I also had an analysis to share, but I don't recall it, and I'm currently on my way out for a while, so no time to do a repeat analysis.
 
Quote from Put_Master:

Got a partial fill thus far, on $20 ANV for June.
Credit $0.95
Annualized % return..... 13%.
otm cushion..... 14%

I did my research a while ago, so I don't recall why I'm selecting the stock or strike.
But apparently I think a BE price of $19.05 is reasonable.
And there is some tech support in the $19 - $20 area, per the 5 year chart.
http://finance.yahoo.com/q/bc?s=NUAN&t=2y&l=on&z=l&q=b&c=

This trade is NOT a recomendation.
Just sharing the investment.
Wish I also had an analysis to share, but I don't recall it, and I'm currently on my way out for a while, so no time to do a repeat analysis.
More...

lol 1 lot has traded.
 
Quote from atticus:

lol 1 lot has traded.
More...
I received a confirmation that part of my order was filled.
Since I attempt to post my trades in "real time", that was when I shared the trade,.... hoping the remaining contracts would follow.
Since I had to leave for the day, as I stated in my post, I could not wait to see if the remaining contracts got filled.
 
Sold puts on $13 NOG for June.
Credit $0.65
Annualized % return..... 14%
otm cushion....15%

http://finance.yahoo.com/q/bc?t=2y&l=on&z=l&q=b&p=&a=&c=&s=nog&ql=1

I researched NOG a while ago, so I don't recall the fundamental details.
But I do recall them being a little more mixed than I like.
However, I do like the tech support of NOG in the $14 - $15 area, per the 2 year chart above.
Hence the reason I allowed some flexibility of it's fundamental package.
Hence the reason I initiated the trade when the stock traded under $15.
 
PM, the puts you just sold are on a company in my neck of the woods -- the Northern Oil & Gas (NOG) office overlooks Lake Minnetonka in Wayzata, MN.

It's ironic. An O&G company with a HQ in one of the few states in the nation with zero hydrocarbons. Kind of like Heckmann Water (frac water) in Scottsdale, AZ.

Why don't you come up and visit them? I've got an extra five gallon bucket and after your visit we'll walk across the street and go ice fishing.

Back to business: NOG had some accounting/corp governance issues a while back. I believe they've hired a few adults but Wall Street still doesn't trust them and/or give the proper valuation to their 'non-operator' model. Or maybe the current weakness is just a continuation of the "Bakken differential" trend which means a lot of that North Dakota and Canadian oil is cheap, cheap, cheap because of insufficient pipelines to export and refining centers.

FYI, the brother of the NOG founder is doing the same thing with Voyager Oil, now Emerald Oil.
 
With one hour of trading remaining before the weekend:

Sold puts on $19.25 IPI for June.
Credit $0.80
Annualized % return.....13%

Company is financially healthy with no debt and plenty of cash,... and is reasonably valued by most metrics, at my BE price of $18.45
Most other fundamentals and trends also looked very reasonable.
Per the 2 year chart below there is tech support in the $20 - $21 area.
Hence the reason I initiated the trade, when the stock traded under $21.
I may be able to get a slightly better credit next week, but I didn't want to risk missing the trade.
http://finance.yahoo.com/q/bc?t=2y&l=on&z=l&q=b&p=&a=&c=&s=ipi&ql=1
On a negative note, there was quite a bit of insider selling. But that was back in Sept,... 5 months ago.
 
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