Seeking Alpha

theregans

theregans
Send Message
View as an RSS Feed
View theregans' Comments BY TICKER:
Latest  |  Highest rated
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    Agreed, the greatest asset you have when you are young is time when it comes to investing. As you get older you are forced to try and increase your returns to make up for lost time. This usually doesn't end well...
    Apr 23, 2015. 01:37 PM | 2 Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    While yes this is an acceptable approach, I prefer to add the extra juice I get from options. I tend to to sell the calls just before the earnings date. Earnings are a known event with unknown outcomes. Sometimes earnings are good, sometimes they are not. This unknown outcome causes an increase in implied volatility in options and causes the premiums to go up. Think of it as trying to buy hurricane insurance the day before a hurricane is foretasted. The insurance premiums go through the roof. (pardon the pun) One can sell calls 4 times a year only holding them for a short period of time and add an additional 4% quite easily. Can your stock be called away? You bet it can and it does from time to time. In my experience about 10%-15% of the time. What did I gain or lose? Well if I get called away it is usually at a higher price than I paid for the stock as I usually only sell calls on stocks that I have a reduced basis on. Plus I am up the premium collected on the option sold. Usually not just for that option but for several previous earnings as well. Can you get back in, yes, but that is up to you. If you liked XYZ at $100 do you still like it at say $110? Up to you. I always have a certain percentage of cash on hand and a shopping list in hand. The shopping list is directly related to puts that I sell on stocks I want to own at a price I determine in advance. EG. I would love to own more AAPL @ $120.00 I sell a put for next January on AAPL at the $120 strike and collect around $7.50 that by the way is about 9% annualized return on a stock I don't even have to own. My worst case scenario is AAPL goes sub $100 and I am obligated to buy it at $120 come January. Could it happen? Sure, I however think it is highly unlikely. If it drops just under $120 I get to own it for $113.00 because I deduct the premium I collected up front when I sold the put.

    For me the way I use options it is win win win. The biggest key to this is knowing the value of the stocks you own. I am not interested in stocks with pie in the sky P/E's that maybe one day some day will grow into them. I am interested in strong dividend growers that make cash hand over fist on a regular basis.

    Stock goes up, I win.
    Stock goes down, I win.
    Stock goes sideways, I win

    Look this is not for everyone, but some of the comments I've read here trying to scare people into thinking options are evil and you can't win are at the very least misinformed and some are just down right disingenuous. With a little research and some hard work anyone can do this. Good luck to all!
    Apr 23, 2015. 01:35 PM | 3 Likes Like |Link to Comment
  • Replace The 4% Retirement Rule With These 4% Dividend Stocks [View article]
    One can easily make it 6% if you add in a few option strategies such as selling covered calls and selling naked or even cash covered puts to reduce basis. Of course this requires a little work and a bit of knowledge to do so. Something sorely missing from most investors. You can even make it 8% if you are willing to do your homework!
    Apr 22, 2015. 05:24 PM | 17 Likes Like |Link to Comment
  • Buy Potash Corp. As Long-Term Fundamentals Are In Place [View article]
    Important to keep in mind is that K+S Potash is currently building the largest mine in the world in southern Saskatchewan. This will lead to perhaps an oversupply near to mid term and could affect pricing.

    http://bit.ly/1E6cpqT
    Feb 18, 2015. 12:24 PM | 2 Likes Like |Link to Comment
  • How Does VXX's Daily Roll Work? [View article]
    Unless you are on the other side of that trade....
    Jan 20, 2015. 04:47 PM | 1 Like Like |Link to Comment
  • Closing Out My Long Volatility Position And What's Next [View article]
    Yes. They Expire on Jan 16
    Dec 17, 2014. 07:31 AM | Likes Like |Link to Comment
  • Closing Out My Long Volatility Position And What's Next [View article]
    I sold a bunch of $75, $80 and $85 Jan monthly calls naked. The premium is just insane. ROI north of 15% in less than 30 days.
    Dec 16, 2014. 10:42 PM | Likes Like |Link to Comment
  • BP Is A Strong Buy, But Not Because Of Takeover Speculation [View article]
    This is a complete no brainer just as $AAPL was last year in the $400's and $NFLX was a few years back around $75.00. I started my position today @ $38.50 and I hope it continues to crater so I can build a full position in the coming weeks and months. In my lifetime, I have seen opportunities like this time and time again. I would always say that is a steal and I would enter the position. I would then prove impatient in my younger years, wanting to see immediate returns and confirmation of my bias. Only to sell too early and then watch in horror as each one of them recovered and soared. As I have gained experience and gotten older, I have learned to be much more patient.

    Thank God I caught $AAPL last year. I will not miss $BP this time as I did at the time of the spill. I am grateful for this second chance at this great company!
    Dec 9, 2014. 05:23 PM | 1 Like Like |Link to Comment
  • How To Trade Volatility When The Roof Caves In [View article]
    It is a small position in my portfolio. I am primarily an option trader. I am aware of the risks. I am also very aware of the rewards. This is an excellent risk reward in my opinion. Especially in high IV times. In my lifetime I have yet to see vol not revert to the mean. It ALWAYS does.

    There is always more to the story at first glance. They say selling naked calls can wipe you out. I guess that is true if you lever up to the max and it moves against you. I am selling way out of the money calls. When vxx spiked to almost $45.00 I was selling Nov monthly $75.00 calls for a more than 30% ROI.

    Buying the VIX is a directional trade. You're right you win your wrong and you lose. Selling calls in small lots during all times has kept me in the game. I go as much as 10X my position size in high vol markets. Never using up more than 25% of my capital. Could I get totally wiped out? I guess in theory anything is possible. I sleep very well with this strategy in place. I can be wrong about direction and still make money. Collecting some of the richest premium available in the options markets while playing it safe with my guidelines and rules. It is not for everybody, but it works for me!
    Oct 25, 2014. 10:41 AM | 1 Like Like |Link to Comment
  • How To Trade Volatility When The Roof Caves In [View article]
    I short $VXX calls as a regular trade all the time. Small position untill $VIX spikes like it did last week. At this time I load up the truck and short larger amounts of calls on the $VXX. This has proved to be a very successful trade for me. I short way OTM calls. Last week I was shorting $75.00 calls when the $VXX was in the low 40.00's. The return on capital was north of 30% for a 30-45 day trade. I shorted several different expiration dates. I have yet to have to roll up and or out with this trade. Although I am sure one day I will. Once I collect premium, I NEVER EVER give it back!
    Oct 22, 2014. 11:48 AM | Likes Like |Link to Comment
  • It's Time To Get Short Volatility [View article]
    That's what it takes to make a market. Just when you think you have it all figured out, know there is someone on the other side who has the exact opposite view that you have. They are also willing to put their money where their mouth is too....

    So far my $55 & $56 Nov. $VXX calls I sold are way under water on paper. With the $VXX trading around $41.00 I'm still OK. I may have to roll up and out if we breech $50.00 That is my line in the sand.

    Once I collect premium, I never EVER give it back. My time horizon might change, it may change my annualized ROI, but I will manage these trades so that the overall health of my portfolio remains positive.
    Oct 16, 2014. 10:57 AM | Likes Like |Link to Comment
  • It's Time To Get Short Volatility [View article]
    Yes you are correct in that. However I don't allow my position size on any 1 trade to go past 5% of my account. By diversifying in this way I avoid a cataclysmic event that could wipe me out totally. I sell short calls and puts on several underlying in my trading account. Only use 50% of my capital at any given time. If you know what you are doing, the reward makes the risk worthwhile.
    Sep 30, 2014. 10:20 AM | 1 Like Like |Link to Comment
  • It's Time To Get Short Volatility [View article]
    I think another good way to play this is to short VXX call options. I have been doing this for some time now with great success. It provides an added margin of safety.

    For example as I write this one could sell the $55.00 call strike for Nov and collect a credit of $46.00 on an outlay of $347.00 for a return of 13% minus fee's in less than 2 months with an almost 100% safety factor with the VXX trading around $30.00

    Just another way to skin the same cat....
    Sep 29, 2014. 11:20 AM | Likes Like |Link to Comment
  • Investors Can't Believe The Apple Hype [View article]
    I think you make a legitimate case for trading around the stock. For those of us holding it for the long term we just continue to cash in our dividends and watch to see how high this will go in the coming years.
    Sep 17, 2014. 01:21 PM | 8 Likes Like |Link to Comment
  • Maybe You Shouldn't Pay Off Your Mortgage [View article]
    As a fellow Canadian I highly recommend you look into the "Smith maneuver". Get a HELOC and use the funds to invest in blue chip high dividend paying stocks and deduct the interest on the HELOC hence making your "Canadian EH" mortgage totally deductible!
    Sep 2, 2014. 12:58 PM | 1 Like Like |Link to Comment
COMMENTS STATS
65 Comments
138 Likes