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Options2Wealth
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I used to run a limited partnership, boutique hedge fund in the 90s. Retired in 2000 and moved from New York City to Toronto, Canada, got married, raised a family and basically settled down. After a few years in Toronto, my wife got tired of the city’s 8 months of cold weather and insisted that... More
  • Let The Games Begin... 0 comments
    Dec 31, 2012 2:18 AM | about stocks: FSLR, S, SPWR, SUNE

    As I mentioned in my intro post, the purpose of this blog is to prove my hypothesis that "investing" strictly in stock options (100%) does not have to be risky.

    With adequate due diligence and using my proprietary methodology, I will show how with just $10,000 and with minimal trading in the account, I should be able achieve a rate of return that is just not possible with any other investment instrument available today. And most importantly I will do so with 100% transparency and in real time.

    Of course, with the so-called "fiscal cliff" noise in the background, I sure have my work cut out for myself...But then that's how the cookie has crumbled for me and I have to make the best use of the cards that I have been dealt...

    So let's begin this experiment by me allowing a sneak peek into my picks for tomorrow...

    I will be "purchasing"* options in the following underlying securities:

    SPWR (SunPower Corporation)

    WFR ( MEMC Electronic Materials, Inc.)

    S (Sprint Nextel Corp.)

    * For complete transparency, I should point out that options in these 3 stocks are already in my portfolio for a number of weeks and that my buy in price is substantially below their current market prices(s). Hopefully, with the markets somewhat jittery because of the lack of progress shown by the members of our Senate and the House of Representatives, my tomorrow's "buy-in" price(s) for the above 3 stocks' options will be better than their respective closing price(s) on Friday...Once I have made my "purchases" in these 3 companies, then, going forward, my sell decisions here and all my new Buys in the next 6 months, will all mimic my move(s) in my real life portfolio.

    I will be allocating the following percentages of the $10,000 to the 3 stocks:

    S (Sprint Nextel Corp.) : 15% or $1,500

    SPWR (SunPower Corporation) : 40% or $4,000

    WFR ( MEMC Electronic Materials, Inc.) : 25% or $2,500

    Cash: 20% or $2,000

    As of 7:00 pm Pacific (10:00 pm Eastern) today, December 30th, 2012, no deal has been announced between the Republicans and the Democrats on the most pressing issue facing our nation this week. Therefore, I don't have a clue as to how the markets will react tomorrow at the open...So here is my strategy for the next few trading days:

    Since I plan to hold $4000 in SPWR options, $2500 in WFR options and $1500 in S options, I therefore plan to be very opportunistic in making the requisite purchases...In other words, I will try to accumulate my positions over time. The remaining $2000 in cash that I'll be left with after I complete my purchases, I'll leave for other opportunities that should present themselves over the next few days...

    The Options (CALLS) that I will be purchasing are as follows:

    S : May 18, 2013, $6.00 Strike Price ; Current Ask: $0.13

    SPWR: March 16, 2013, $6.00 Strike Price ; Current Ask: $0.41

    WFR: April 20, 2013, $3.50 Strike Price ; Current Ask: $0.39

    So there you have it! I will try and post in real time every time I make the commitment to "purchase" the above mentioned options.

    The next 6 months should be fun...

    Now let the games begin!

    kp

    DISCLAIMER: All postings made here are strictly for my personal record keeping and in no way, shape or form, am I even remotely suggesting others to follow my Buy and Sell moves. Trading options is definitely not for the faint of heart as one's portfolio can move up, or down, anywhere between 10%-30% during a single trading day. Feel free to follow my progress here, but PLEASE do not follow my moves. However, if, in spite of all my exhortations, should you decide to do so, be advised that you, and ONLY YOU will be responsible for any losses that you may suffer...In other words, the onus is strictly on you.

    Disclosure: I am long FSLR, S, SPWR, WFR.

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