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Fear & Greed Trader
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INDEPENDENT Financial Advisor / Professional Investor- with over 30 years of navigating the Stock market's "fear and greed" cycles that challenge the average investor. Investment strategies that combine Theory, Practice and Experience to produce Portfolios focused on achieving positive... More
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  • Option / Income Strategies For A Range Bound Market 1 comment
    Jul 5, 2013 5:03 PM | about stocks: EBAY, LVS

    Given the latest advance by the S & P this year, I have opined that we may be in a trading range for a while until we "break " one way or another.. 1560 defined recently on the downside & 1650 or so on the upside..

    If in fact we might be in a "flat market" this "covered call strategy" will work to collect income.. I.E June 5 when i put this position on S & P was at 1608, today we are at 1620 , lots of action in between but little movement..

    Its a good intermediate term strategy that I employ with a percentage of my portfolio..

    I call it my "rent a stock " strategy, on the one hand u have to "like" the underlying company, BUT have to be willing to have it "called away" , so u can't fall in love... Lots of folks can't get their arms around that concept , therefore its not for all..

    My comments posted from another Blog on covered call writing from June

    " (NASDAQ:EBAY) is my latest covered call play. Bot EBAY 6/5 @ 52.15 , Sold the July 52.50 calls for $2.16.. If EBAY is above 52.50 on July 20 ( expiration day) , the yield is 4.7% for holding the stock for 6 weeks . If it is below 52.50 my yield is 3.8% for the same 6 weeks, and I own the stock at an effective price of $49.90. "

    So far that position looks fine with EBAY trading @ 53.25 as of 7/5/13
    IF expiration was today I would garner the 4.7% in a 6 week period for putting on the position.

    You can see from the comment what the other possible scenarios might be..

    Here is another position on put on today (7/5)

    Bot (NYSE:LVS) @ 52.36 Sold the AUG 52.50 calls for $2.32 ,If LVS is 52.50 or higher on Aug 17 (expiration) , yield works out to 4.5% on a holding period of 42 days , annualized yield approx. 48% or so.. ...
    If not, I own for a net price of $50.02, something I would be OK with..

    LVS is one that I like for long term, already own it in portfolio , shares purchased today are in addition to that :)

    If you can embrace this strategy you can receive very nice annualized gains.

    I invite you to follow these two situations, and see how they turn out and if it's for you perhaps "graduate" to the next level.

    Disclosure: I am long EBAY, LVS.

    Additional disclosure: Don't be an "average " investor, Graduate to the next level with For more ideas & personalized service Email--

    Stocks: EBAY, LVS
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  • Land of Milk and Honey
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    Comments (4995) | Send Message
    I'll be following along... :) to see how it works.
    10 Jul 2013, 01:34 AM Reply Like
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