I had some positions expire this afternoon.

music selection:  “Regular People (Conceit)” — Pantera

Covered calls in SXCP and PSEC expire with shares being called.  I’ll re-enter the positions on Monday with written puts.

Written puts in BSM, ARLP, and AHGP expired out of the money.  I will re-enter BSM on Monday but ARLP and AHGP have moved up into a less attractive price so I’ll let those go.

Written puts in GEL and SDLP closed in the money and will result in assigned shares.  I’ll write covered calls on both on Monday.

Devour your prey raptors!

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Friday Expiries

Never miss another opportunity to devour prey!

4 thoughts on “Friday Expiries

  • August 22, 2016 at 8:22 pm
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    Do you have a weekly or monthly % goal of total capital that you aim for in option or option plus dividend income out of your taxable account? You have mentioned looking for at least a 12% annualized rate of return. Do you differentiate between taxable and non- taxable accounts?

    The longer I trade and invest it seems that my IRA and Roth IRA accounts almost manage themselves with replacing trades that have expired or been assigned with similar trades the following week as long as it still makes sense. As these accounts are cash secured there is a somewhat conservative limit to both the risk and reward. The margin available on the taxable account makes for different possibilities, but greater opportunities also….

    Reply
    • August 22, 2016 at 8:33 pm
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      Rich,

      I aim to have my minimum budget needs filled or nearly filled by dividends, distributions, and interest. The options trading is pure gravy or if you think about differently, how I plan to stay ahead of inflation with a portfolio composed mostly of high yield but low growth equity.

      Your taxable account (probably) allows up to 5 to 1 leverage on options. That cuts both ways. If you make a bad trade, you have five times the losses. I have been known to use a little margin but go further out of the money to get some additional down side protection. The market is at all time highs and now might not be the time to get aggressive. Best of Luck.

      Reply
      • August 23, 2016 at 6:23 pm
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        Fully agree about high market valuation. Shiller PE @ 27.19 looks like it is near where it was in 2008 . The only higher spikes on the chart is 1928 Black Tuesday and the tech runup from the mid 1990s to 2000.

        I do like the greater flexibility and higher return/annualized return due to the low buying power impact in the margin account, but have not paid any margin interest for the last 6 months. That is where my initial question was coming from. You can generate an acceptable monthly return (1-1.25%) while keeping a good bit of cash on hand as opposed to the cash secured accounts, if that makes any sense…

        Reply
        • August 23, 2016 at 11:27 pm
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          Right, you could write puts only on blue chip Dividend Aristocrats well out of the money and earn 1.25% (times 5) by writing on margin. You’d have in most cases 10% or so downside protection. It’s still not “free money” but it is a nice bonus if you can stomach the risk. I’d only do that if I were using mental 25% hard stops to protect my downside from a 50% crash type event.

          Reply

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