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John R. Conway's  Instablog

John R. Conway
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When I am not trading/investing I enjoy cooking, which is my second passion next to investing. I currently reside in St. Louis, Missouri and I am a graduate of the University of Missouri-St. Louis with a Bachelor of Liberal Studies. I also was in the US Army for eight years in the reserves/in... More
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  • A 1 Month Review Of The Deep In The Money Strategy

    The Deep in the Money strategy is my favorite strategy that I enjoy using when trading the markets. There are other strategies that I employ depending on how the markets are trading, but I prefer to stick with what has been working. In my last instablog post I gave you 3 hypothetical portfolio trades that I was considering and an easy way to use options on them. These were all bought on 2/7/2012 and lets review:

    Alcoa (NYSE:AA) Bought 2 April 12 calls @ 2.76 now going for 2.60

    This is still going for a loss, but have made some of the money back. One thing to note about Alcoa is that you have to be prepared to average cost down (double down) when the stock slips. Alcoa has a high beta and sometimes can trade up/down more than 1%. i clearly got into the stock at the wrong point and should of waited for a pullback. i have been advocating for a while to buy Alcoa under 10 and so far anyone buying shares or calls of Alcoa should have been profitable if you bought this under $10. Let this be a lesson to anyone who is thinking about buying Alcoa, wait for a pullback and be prepared to buy more if you are bullish.

    Bank Of America (NYSE:BAC) Bought 2 April 12 5.5 calls @ 2.48 now going for 4.10

    These calls have almost doubled in a little over a month. I still like Bank of America and from 2/6 to about 3/5 the stock was mostly flat and provided a safe opportunity for investment. The obvious catalyst was the bank stress test and that led shares higher. With these calls almost doubling its now time to take profits or rollover.

    Microsoft (NASDAQ:MSFT) Bought 2 April 12 28 calls for 2.62 now going for 4.82

    Tech has been a nice performer for the start of 2012. I like Microsoft as a solid play in tech looking forward. The stock could pullback, this stock isn't as volatile or has the beta as some of the other high flyer stocks in this sector. I believe there is still some more gas left in the tank in MSFT.

    If one has followed recommendations on the portfolio you would have spent a total of $1,572 and made a profit of $732. This isn't bad for about 1 month of gains. Since April is expiration, I will be closing out these positions and looking forward to trading some different stocks in the hypothetical portfolio. Look for more deep in the money picks to come soon. Thanks for reading and Good Luck!

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: BAC, AA, MSFT
    Mar 16 1:46 PM | Link | Comment!
  • Hypothetical Portfolio Trades
    On February 26, 2012 I wrote an article, "2 Simple Option Strategies For Newer Investors To Consider" and within the article I described how one should consider having their hypothetical portfolio equal their real cash position. For a link to the article and explanation click here.

    On February 7, 2012 here are stocks I was interested in, but also wanted to track performance. I started the hypothetical portfolio using $3,000 and here are the results:

    Trade 1: 2/7 Alcoa (NYSE:AA) Bought 2 April 12 calls @ 2.76

    Now going for 2.37 for a $77 loss

    I have traded Alcoa before, and short term I have been successful trading Alcoa when it is closer to the low $10 range. I am going to wait for Alcoa to drift lower to $10 and look to buy calls. When Alcoa gets to 10.10-10.20 the stock has had some nice bounces.

    2/7 Bank Of America (NYSE:BAC) Bought 2 April 12 5.5 call @ 2.48

    Now going for 2.48

    Now loss or gain here, but 7.78 looks like a nice level for a bounce? Looks like BAC is taking a breather here, but I like the company long term.

    2/7 Microsoft (NASDAQ:MSFT) bought 2 April 12 28 call for 2.62

    Now going for 3.55 for a 186 profit.

    I will be closing these trades soon and will post more. Thanks for reading and being a follower.

    Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in AA over the next 72 hours.

    Feb 27 3:17 PM | Link | Comment!
  • Current Performance For Jan & Feb 2012
    One of the reasons why I'm listing current performance are for readers to see if the authors put their money where their mouth is. Out of 10 articles I have written, 8 of them I have made real option plays. Out of the 8 I am currently 6/7 and only one losing trade ( I currently have 1 trade open). Here is the breakdown:

    GE $15 calls = 8.1% gain
    MO $27 calls = 15.89% gain
    GE $16 calls=10.97% gain
    T $28 calls= 4.97% gain
    GE $17 calls= 6.55% gain
    AA $8 calls=5% gain

    PFE $19 calls 14% (Loss)

    37.21% gain

    Jan was a good month and Feb is looking good for now. There still is a long way to go. Another reason I'm listing gains and losses is for those of you that follow me to see how the ideas that I generate in the articles play out. So far 6 out of 7 isn't to bad. PFE was a learning lesson of buying at the right time and has pulled back more than a dollar since I wrote about it. I still like PFE, but the price action has been poor. I got out of the trade (when looking at a 1 month chart of PFE) when the stock was in the middle of the bollinger bands. I'm glad I did to avoid further losses and now the stock is in the lower part of the Bollinger bands (when viewing a one month chart) I'll get PFE back, but the time prob isn't right now.

    Disclosure: I am long GE.

    Feb 08 4:05 PM | Link | Comment!
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