The recording of the October 3 session discussing the reasons for selling options rather than buying them is now posted on the presentations page at the COOL_Club. You can find it here:
Hi Club Dudies (haha, ok, back to the drawing board on club member's name :)
ETFs:
Virtual Trader (nope I still haven't switched from Vanguard to Schwab yet but am working on it)
Nov. 2 Sell to Open - IWM Nov. Week 2 80 Put .46 premium 3 contracts
Nov. 9 This was PUT to me - final net cost per share $79.64
I felt at the time that odds were, it would probably expire worthless but, of course, that didn't happen. I am now looking to sell Calls - have placed orders past couple of days but they were not filled. I definitely find that IWM has greater price swings than SPY. I feel a bit more nervous when doing CSP with IWM.
I am looking at SPY Puts (for real money) but am afraid to pull the trigger. From everything I'm reading, it seems like there is more room for them to continue downward. So I'm nervous to jump in just yet.
Theresa
Susan Tanoe on
Hello Dudes and Dudettes, I have been monitoring but have yet to pull the trigger as the SPY have been making lower highs and lower lows (downward channel). I am waiting to see some stabilization in the SPY before committing to a trade.
Hi Club Dudies (haha, ok, back to the drawing board on club member's name :)
ETFs:
Virtual Trader (nope I still haven't switched from Vanguard to Schwab yet but am working on it)
Nov. 2 Sell to Open - IWM Nov. Week 2 80 Put .46 premium 3 contracts
Nov. 9 This was PUT to me - final net cost per share $79.64
I felt at the time that odds were, it would probably expire worthless but, of course, that didn't happen. I am now looking to sell Calls - have placed orders past couple of days but they were not filled. I definitely find that IWM has greater price swings than SPY. I feel a bit more nervous when doing CSP with IWM.
I am looking at SPY Puts (for real money) but am afraid to pull the trigger. From everything I'm reading, it seems like there is more room for them to continue downward. So I'm nervous to jump in just yet.
So how low or how long the market will go down is unknown but at
some point we should see a reversal. Measures such as RSI being
below 30 on the S&P indicate an oversold condition but we need
a catalyst to reverse the downtrend such as a settlement of the
Fiscal Cliff that would insure growth in GDP, Jobs as well as
actions leading to a more balance budget. An indication the
European recession will not deepen and affect the US would also
help.
Under the current scenario I view selling CSP's to be overly risky
and likely result in owning the S&P. I may be slow to learn
but I have learned patience in investing is of the utmost
importance and I see being patient and holding cash to be the
proper action right now.
Dan
On 11/14/2012 1:31 PM, Susan Tanoe wrote:
Hello Dudes and Dudettes, I have been monitoring but have yet
to pull the trigger as the SPY have been making lower highs and
lower lows (downward channel). I am waiting to see some
stabilization in the SPY before committing to a trade.
Hi Club
Dudies (haha, ok, back to the drawing board on club
member's name :)
ETFs:
Virtual Trader (nope I still haven't switched from
Vanguard to Schwab yet but am working on it)
Nov. 2 Sell to Open - IWM Nov. Week 2 80 Put
.46 premium 3 contracts
Nov. 9 This was PUT to me - final net cost per share
$79.64
I felt at the time that odds were, it would probably
expire worthless but, of course, that didn't happen. I
am now looking to sell Calls - have placed orders past
couple of days but they were not filled. I definitely
find that IWM has greater price swings than SPY. I feel
a bit more nervous when doing CSP with IWM.
I am looking at SPY Puts (for real money) but am
afraid to pull the trigger. From everything I'm reading,
it seems like there is more room for them to continue
downward. So I'm nervous to jump in just yet.
Theresa
Malcolm Myles on
I'm also in the camp of gun shy on using real
money. But, I'll practice with my virtual account.
Using nothing more than the 2.10 version of the COOL Tool ETF
file, I put in a trade:
STO SPY NOV12 137.5 Put x2 @ 1.20 limit, day only
Net Premium $230.30, APR 102% (my commission rates, not
OIC)
It filled after an hour or so. My reason is that I want to be put
to and want the higher premium so that I can start placing Calls
by next Monday. So I wrote the call At The Money in expectation
that I'll be put to for 2 contracts at 137.5 or 138 by Friday's
expiration.
No other analysis taken into consideration - just using technical
trading based upon Bollinger lines and the spreadsheet.
Malcolm
On 11/14/2012 10:31 AM, Susan Tanoe
wrote:
Hello Dudes and Dudettes, I have been monitoring but have yet
to pull the trigger as the SPY have been making lower highs and
lower lows (downward channel). I am waiting to see some
stabilization in the SPY before committing to a trade.
Hi Club
Dudies (haha, ok, back to the drawing board on club
member's name :)
ETFs:
Virtual Trader (nope I still haven't switched from
Vanguard to Schwab yet but am working on it)
Nov. 2 Sell to Open - IWM Nov. Week 2 80 Put
.46 premium 3 contracts
Nov. 9 This was PUT to me - final net cost per share
$79.64
I felt at the time that odds were, it would probably
expire worthless but, of course, that didn't happen. I
am now looking to sell Calls - have placed orders past
couple of days but they were not filled. I definitely
find that IWM has greater price swings than SPY. I feel
a bit more nervous when doing CSP with IWM.
I am looking at SPY Puts (for real money) but am
afraid to pull the trigger. From everything I'm reading,
it seems like there is more room for them to continue
downward. So I'm nervous to jump in just yet.
Theresa
Theresa H on
Even though I wouldn't do a CSP with real money right now, I decided to use the Virtual Trader to try SPY today:
SPY Nov 12 136 Put 3 contracts .40 premium 31% APR
I placed this order in the morning and when I looked again in the afternoon, it was filled. I noticed that SPY had dropped below 136 and I placed another:
SPY Nov 12 135 Put 3 contracts .40 premium 31% APR
I don't think this experiment is going to go in my favor, since the price continues to drop, but, luckily, it's just the Virtual Trader.
So how low or how long the market will go down is unknown but at
some point we should see a reversal. Measures such as RSI being
below 30 on the S&P indicate an oversold condition but we need
a catalyst to reverse the downtrend such as a settlement of the
Fiscal Cliff that would insure growth in GDP, Jobs as well as
actions leading to a more balance budget. An indication the
European recession will not deepen and affect the US would also
help.
Under the current scenario I view selling CSP's to be overly risky
and likely result in owning the S&P. I may be slow to learn
but I have learned patience in investing is of the utmost
importance and I see being patient and holding cash to be the
proper action right now.
Dan
On 11/14/2012 1:31 PM, Susan Tanoe wrote:
Hello Dudes and Dudettes, I have been monitoring but have yet
to pull the trigger as the SPY have been making lower highs and
lower lows (downward channel). I am waiting to see some
stabilization in the SPY before committing to a trade.
Hi Club
Dudies (haha, ok, back to the drawing board on club
member's name :)
ETFs:
Virtual Trader (nope I still haven't switched from
Vanguard to Schwab yet but am working on it)
Nov. 2 Sell to Open - IWM Nov. Week 2 80 Put
.46 premium 3 contracts
Nov. 9 This was PUT to me - final net cost per share
$79.64
I felt at the time that odds were, it would probably
expire worthless but, of course, that didn't happen. I
am now looking to sell Calls - have placed orders past
couple of days but they were not filled. I definitely
find that IWM has greater price swings than SPY. I feel
a bit more nervous when doing CSP with IWM.
I am looking at SPY Puts (for real money) but am
afraid to pull the trigger. From everything I'm reading,
it seems like there is more room for them to continue
downward. So I'm nervous to jump in just yet.