09.15.14

Hi Folks,

The Options Playbook, free, Online

There are a number of option rolls this week. I want to get a head start on some of the names. The first position is $YHOO. This will be  a busy week. I have names to add and names to remove.

Please remember the goal is this:

1. Make money via options,

2. Rotate profits back into special situation stocks; rotate option profits back into dividend stocks.

3. The option profits provides hedges (buy car insurance before the car accident) to the overall portfolio.  

Here is an image of the $YHOO option weekly roll from Friday

09.13.14.YHOO

The #19 and #20 were adjustments to the Yahoo position. I will now have a few more adjustments to address.

Trades by Date:

09.15.14:

Trades 1 – Trades 4

We have various option positions based upon the Alibaba $BABA IPO. Here is an image of the positions. 

option.position

January 15th, Option Rolls

Trade 1. Adjusting the $YHOO 75-calls that were moved up to $40. I am moving them to $44. $YHOO closed at $43 + after hours – on Friday 09.12.14. 

The Alibaba is going up in anticipation and I expect $YHOO to move higher and $YHOO to move up due to its Alibaba holdings.

YHOO.BD.09.15.14

Net $14,250-Credit. 

Sold (50) diagonal calendar weekly calls (done on Friday); strike $42.50-calls; see Yahoo trade #19 above. We will adjust this each week. 

Trade 2. Adjusting the $YHOO, October-expiration, 45-calls, strike $36. I am moving them to $44.

24000.YHOO.BD.09.14.14

Net $24,000-Credit. 

Trade 3: Selling 70% Weekly Calls of Our 50-Calls, Strike $50. 

This is outlined in Trade 2. 

yhoo.35.BD.09.14

Net $4,480-Credit. 

Trade 4. Adjusting the $YHOO, Jan-expiry, for our benefit. 

1.YHOO.BD.09.14.14

Net $250-Debit.

 

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Summary:

The Option Trading is not designed to build a big option portfolio. It will grow in the sense that a person’s net work will increase – and the option portoflio will grow perhaps – and our goal is to accomplish the following:

1. We take option profits to increase dividend growth stocks,

2. We take option profits to increase our high yield dividend positions,

3. We take option profits to increase closed end fund, with monthly dividend, positions

4. We take option profits to increase our small cap, clean balance sheet, positions

5. We take option profits to increase our MLP exposure

6. We take option profits to increase hedges (eg $VIX, portfolio hedges)

7. We take option profits to increase our exposure (via growth names and developing a zero cost basis) in risky names such as $TSLA, $NFLX. At the same time, this can be a bearish position.

8. We take option profits to increase our dividend growth names (eg $NKE, $SBUX)

9. We take option profits to increase interest rate hedges if we focused upon income based securities – these have interest rate risk which we can reduce or eliminate

10. We take option profits to increase an overall diversified portfolio: gold, REITs, mREITS, ,overseas exposures.

11. We take option profits to increase an overall diversified portfolio

Sometimes I think I don’t focus upon the goal of rotating option profits into a conservativve Nike or Starbucks or a CEF. That’s the whole “method to the madness”.

We rotate money into stocks.

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Our bottom line goal: 1) hedging; 2) use options for expensive stocks with zero dividends; and 3) using the option income to increase our monthly/quarterly dividend income.
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Disclaimer

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