Taking 76K to 500K by Year End

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Quote from fildi101:

neke,

just one word of advice from someone who had similar goals to you last year... when you get near to that 500k, DON'T hold out for the final figure. I've been there, and gave back around 200k in january.. (also on AAPL!).. the temptation to hold on to the positon for that extra few grand is often the killer..

I also trade equity and equity options.. exclusively on AAPL, and have similar targets. went from 200k to just under 600k, but was shooting for 1m and ended up getting burn on the pre-iPhone dip, going back down to 400k... oh well, lesson learned! This year I'm going to be much more conservative, and just shoot for 100% on the year.

Not sure what your strategies are, but I guess they're not a million miles from mine.

edit: just read back a few pages, and your strategies do seem rather different from mine. :) (I sell strangles for income through the year and then place a few big LEAPS trades when the stock capitulates).


GL
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I've been into the AAPL options as well...though not exclusively. How has the short strangle for income approach worked for you? I had employed a similiar method but realized I couldn't get my strikes wide enough to avoid the inevitable juke driven by one major news event. As far as AAPL is concerned, I've just cut my trade size and put on a few long JUL 100/110 call verticals. This is one of the few stocks where I'm just willing to put technicals aside, go out a few months and take a long position, given the recent dip / consolidation. I sure could lose, but the risk is worth it ($2.00 for that vert spread...):cool:
 
Quote from verbotenlaandia:
How has the short strangle for income approach worked for you? I had employed a similiar method but realized I couldn't get my strikes wide enough to avoid the inevitable juke driven by one major news event.
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I usually sell strangles across all the available months for the upcoming year, at stikes where the option is in the 2-4 dollar range. If the options are too cheap, I look to sell a month further out. I usually close them out couple of weeks before expiry, or when they've eroded at least 50-70% or so in value, when the risk/reward benefits are no longer there.

I often leg into the spread, puts first, if we have sharp dip, which gives me an extra cushion.

If a put goes against me, I'll normally let it be exercised, since I'm also pretty bullish on AAPL.. If the call goes against me I'll generally close it for a small loss, and consider taking the the profit on the pt to compensate.

Other factors when choosing the strikes include :-

- open interest. If two strikes have particularly large open interest, I oten sell the most OTM one.
- TA.. ideally sell them just outside key support or resistance
- gut instinct.. I've followed AAPL day in, day out for two years now, and I've got a good feel for the parameters of the stock.

I also like to stagger my selling as much as possible, maybe one or two contracts per day, so if it goes against me, I'm only partially commited and can sell more options to fade any adverse move. I'm pretty conservative like this.

as a rule I only sell puts at prices I am happy to buy the stock at, and will close out short calls as soon as they go more than 25% against me.

overall, the strangle selling is good for 5-7k a month on a 150k account.

As for for july, I'm short puts at 65, 70 and 75, and short calls at 100, 110 and 115. Depending on what happens regarding the iPhone I may have to close out the calls early, but the last few years AAPL has been weak in the summer so I'm pretty happy with these strikes.

I am also just starting to slowly build a position in jan 100-110 bull spreads, ( currently around 2.90 for the spread), and have buy orders for these set up all the way down to 0.50 a spread.

reward's only marginally worse than the july100-110s, but, given the traditional xmas run-up, these are a less risky bet for me.

hope this helps
 
Quote from fildi101:

I usually sell strangles across all the available months for the upcoming year, at stikes where the option is in the 2-4 dollar range. If the options are too cheap, I look to sell a month further out. I usually close them out couple of weeks before expiry, or when they've eroded at least 50-70% or so in value, when the risk/reward benefits are no longer there.

I often leg into the spread, puts first, if we have sharp dip, which gives me an extra cushion.

If a put goes against me, I'll normally let it be exercised, since I'm also pretty bullish on AAPL.. If the call goes against me I'll generally close it for a small loss, and consider taking the the profit on the pt to compensate.

Other factors when choosing the strikes include :-

- open interest. If two strikes have particularly large open interest, I oten sell the most OTM one.
- TA.. ideally sell them just outside key support or resistance
- gut instinct.. I've followed AAPL day in, day out for two years now, and I've got a good feel for the parameters of the stock.

I also like to stagger my selling as much as possible, maybe one or two contracts per day, so if it goes against me, I'm only partially commited and can sell more options to fade any adverse move. I'm pretty conservative like this.

as a rule I only sell puts at prices I am happy to buy the stock at, and will close out short calls as soon as they go more than 25% against me.

overall, the strangle selling is good for 5-7k a month on a 150k account.

As for for july, I'm short puts at 65, 70 and 75, and short calls at 100, 110 and 115. Depending on what happens regarding the iPhone I may have to close out the calls early, but the last few years AAPL has been weak in the summer so I'm pretty happy with these strikes.

I am also just starting to slowly build a position in jan 100-110 bull spreads, ( currently around 2.90 for the spread), and have buy orders for these set up all the way down to 0.50 a spread.

reward's only marginally worse than the july100-110s, but, given the traditional xmas run-up, these are a less risky bet for me.

hope this helps
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Thanks, that's more information than I could have hoped for...I will definitely take another look at the strategy...
 
Quote from neke:

I have set this as my target for the remainder of 2007. I started the year with 91K, lost 30K in January. So far in February I am up 20K. Took out 5K in Early February. But inside me I know it is possible to take 76K to 500K from now (end of February) to the end of December. All I need is to be disciplined and not throw money away frivolously.

I shall maintain a journal here of my performance, with daily or weekly updates. I shall give report of particularly memorable trades.

So here is my performance this year in summary:

Opening Balance 91000
Performance in Jan (30000)
Performance in Feb 20000
Withdrawal in Feb (5000)
-----------
Current Balance 76000
------------
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Hi Neke,
Can you give us an update of current Balance?
 
Hi
I'm curious as the motivation for this self-imposed public challenge.

The target seems arbitrary and even unambitious (why cap?).

If achieved, will it be repeatable?

The time period of 12 months may not coincide with your equity curve so you may be inclined to force trades at the end. (It's also long enough for you to get lucky.)

I hope you achieve your goals and take what the market offers without forcing anything just to impress or meet some deadline.

This kind of unnecessary pressure is just the opposite of what I look for in my nascent trading career so I am genuinely curious as to why you are doing this, I'm not criticising.
 
Update for Week 3 ended 3/9/2007
-----------------------------------
Sigh of relief. Good week after the disaster that was last week. Did any body catch the bounce in LEND? Entered in at 5.00 on Wednesday, exited at 5.40 (too chicken-hearted to stay to close of market). Wondering what the balance on my account would have been if I had stayed till today. But such is trading.

Balance B/F: 64,135
Profit for the week 14,277
-------------------------------------
Balance C/F: 78,412
Number of Trades 24
Number of Profitable Trades 16
 
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