This weekend 2 new Bear Call Trade Alerts have been emailed for trades that when filled will complete Iron Condor trades on the NDX (4.4%) and SPX (5.3%) Indexes. The RUT index has been rising making it difficult to complete safe Bull Put and Bear Call trades. These are the only 2 trades I want to complete next week creating the 3rd and final Iron Condor trade expiring in March.
All the Bull Put and Bear Call spreads are safe and should be expiring in 21 days on March 16th. As in the past 2 months the NDX Bull Put and Bear Call short options are over 100 points away from the current Index Value. This is becoming my favorite index so next month I will be increasing the number of contracts sold by 50%.
Starting with this Update I am including 2 attachments. I have successfully created, with the help of an Adobe Engineer who is also a subscriber, a PDF file with links that work. You can open this file with your Adobe Reader and click on any trade link to reach the actual Trade Alert. You can also print this update using the PDF file to one 8x11 page. Many subscribers have been asking for a printable PDF file with working links. I have also attached the HTML file that you can open with any browser.
Saturday, February 24, 2007
Saturday, February 17, 2007
All February Option Credit Spreads Expired Worthless This Week!!!!!
All Bull Put and Bear Call Spread trades expired worthless on Friday February 16th. 4 Bull Put Spreads trades on the 3 Indexes were traded first followed by a Bear Call Spread trade on the SPX Index. The NDX Bear Call Spread was entered last month as part of a rolling adjustment and will not be counted as part of this month's return performance.
The total return this month was 2.5% ($160/$6,340). All credit premiums collected totaled $160 (20+30+20+20+70) and the margin required per contract was $6,340 (980+970+980+980+2,430). If you traded 10 contracts per spread your credits totaled $1,600, 20 contracts $3,200. This 2.5% return missed my goal of at least 3%. Only one Iron Condor trade was completed on the SPX index causing this lower than expected return. With at least 2 Iron Condors completed each month the return should be 3-4% and with 3 Iron Condors 4-5%.
Those subscribers who rolled the January NDX Bear Call trade to the February (1900/1925) were rewarded this week because the spread trade expired. The strategy worked perfectly and prevented realizing a loss on a spread trade in trouble. By closing and rolling this Bear Call spread we successfully extended the time frame for realizing a profit from the original trade filled in January.
This weekend I will be emailing new credit spread trades expiring in March. We are doing very well with Bull Put trades so I will be focused on these first for each index. If I can execute a safe Iron Condor I will certainly do this. Last month we started entering our limit amounts using 1/2 of the bid/ask midpoints. All my trades were filled at these higher limits amounts as were the trades for the majority of subscribers who sent me emails. I will continue this process for all future trades. In the instance our trades are not filled I will email a replacement trade.
If any subscriber would like a Flash movie illustrating the steps to order a credit spread trade please send me an email. I have Flash movies made using OptionsXpress, TradeKing, Interactive Brokers and Think Or Swim. I have a subscriber making the IB and TOS movies because I do not have accounts with these 2 brokers. This subscribe is also helping me to create a PDF movie file that should work on subscriber's computers who are experiencing problems running the HTML and .SWF files. For the PDF movie to run you must have Adobe Reader 8.0 which can be downloaded for free at Adobe's website.
Click to view more details of these
February trades.
The total return this month was 2.5% ($160/$6,340). All credit premiums collected totaled $160 (20+30+20+20+70) and the margin required per contract was $6,340 (980+970+980+980+2,430). If you traded 10 contracts per spread your credits totaled $1,600, 20 contracts $3,200. This 2.5% return missed my goal of at least 3%. Only one Iron Condor trade was completed on the SPX index causing this lower than expected return. With at least 2 Iron Condors completed each month the return should be 3-4% and with 3 Iron Condors 4-5%.
Those subscribers who rolled the January NDX Bear Call trade to the February (1900/1925) were rewarded this week because the spread trade expired. The strategy worked perfectly and prevented realizing a loss on a spread trade in trouble. By closing and rolling this Bear Call spread we successfully extended the time frame for realizing a profit from the original trade filled in January.
This weekend I will be emailing new credit spread trades expiring in March. We are doing very well with Bull Put trades so I will be focused on these first for each index. If I can execute a safe Iron Condor I will certainly do this. Last month we started entering our limit amounts using 1/2 of the bid/ask midpoints. All my trades were filled at these higher limits amounts as were the trades for the majority of subscribers who sent me emails. I will continue this process for all future trades. In the instance our trades are not filled I will email a replacement trade.
If any subscriber would like a Flash movie illustrating the steps to order a credit spread trade please send me an email. I have Flash movies made using OptionsXpress, TradeKing, Interactive Brokers and Think Or Swim. I have a subscriber making the IB and TOS movies because I do not have accounts with these 2 brokers. This subscribe is also helping me to create a PDF movie file that should work on subscriber's computers who are experiencing problems running the HTML and .SWF files. For the PDF movie to run you must have Adobe Reader 8.0 which can be downloaded for free at Adobe's website.
Click to view more details of these
February trades.
Saturday, February 10, 2007
Update on February Trades Expiring in 6 Days.
This week all the Bull Put and Bear Call spreads became a little safer and should all be expiring next Friday the 16th. The underlying SPX is now 37 points away from our Bear Call short strike of 1475. It would take a move of over 2% for it to breach our short strike. Certainly possible, but unlikely. Remember, since SPX is a European option so it settles at the opening price on Friday. This gives us only four trading days until option expiration.
Those subscribers who rolled the January NDX Bear Call trade to March (1900/1925) will be rewarded next week when this spread expires. The strategy worked perfectly and prevented realizing a loss on a spread trade in trouble. By closing and rolling this Bear Call spread we just extended the time frame for realizing a profit from the original trade filled in January. I am sure we will have to close and roll again sometime in 2007. To insure everyone is comfortable executing these rolling trades I will complement my Rolling Trade Alert with a Flash movie to illustrate the exact steps for processing each of the 2 required trades. This Flash movie with audio will be available on request and demonstrate the trades using TradeKing's and OptionXpress's trading systems.
Next weekend I will be emailing new credit spread trades expiring in March. We are doing very well with Bull Put trades so I will be focused on these first for each index. If I can execute a safe Iron Condor I will certainly do this. Last month we started entering our limit amounts using 1/2 of the bid/ask midpoints. All my trades were filled at these higher limits amounts as were the trades for the majority of subscribers who sent me emails. I will continue this process for all future trades. In the instance our trades are not filled I will email a new trade like I did this month. The RUT 710/700 Bull Put was emailed on 1/20/2007 but was never filled for the majority of subscribers. I emailed the new RUT 740/730 Bull Put trade on 1/30/2007 and this trade was filled.
This is tax time so I must share with all subscribers a message I received from a subscriber this weekend.
Brad, I tried to "mess around" with manually doing this but I discovered another way to handle this in Turbo Tax (just in case you ever get this question again from others). I used Form 6781. On that form only input the gains and losses for the year and the Turbo Tax program automatically takes the data and puts it on the correct lines according to the 60/40 rule automatically links it to line 4 and 11 of schedule D. So you were right and this is another great thing about trading options - save $$ on taxes. Dick
Those subscribers who rolled the January NDX Bear Call trade to March (1900/1925) will be rewarded next week when this spread expires. The strategy worked perfectly and prevented realizing a loss on a spread trade in trouble. By closing and rolling this Bear Call spread we just extended the time frame for realizing a profit from the original trade filled in January. I am sure we will have to close and roll again sometime in 2007. To insure everyone is comfortable executing these rolling trades I will complement my Rolling Trade Alert with a Flash movie to illustrate the exact steps for processing each of the 2 required trades. This Flash movie with audio will be available on request and demonstrate the trades using TradeKing's and OptionXpress's trading systems.
Next weekend I will be emailing new credit spread trades expiring in March. We are doing very well with Bull Put trades so I will be focused on these first for each index. If I can execute a safe Iron Condor I will certainly do this. Last month we started entering our limit amounts using 1/2 of the bid/ask midpoints. All my trades were filled at these higher limits amounts as were the trades for the majority of subscribers who sent me emails. I will continue this process for all future trades. In the instance our trades are not filled I will email a new trade like I did this month. The RUT 710/700 Bull Put was emailed on 1/20/2007 but was never filled for the majority of subscribers. I emailed the new RUT 740/730 Bull Put trade on 1/30/2007 and this trade was filled.
This is tax time so I must share with all subscribers a message I received from a subscriber this weekend.
Brad, I tried to "mess around" with manually doing this but I discovered another way to handle this in Turbo Tax (just in case you ever get this question again from others). I used Form 6781. On that form only input the gains and losses for the year and the Turbo Tax program automatically takes the data and puts it on the correct lines according to the 60/40 rule automatically links it to line 4 and 11 of schedule D. So you were right and this is another great thing about trading options - save $$ on taxes. Dick
Sunday, February 4, 2007
Update on February Trades Expiring in 14 Days.
The markets rose last week making all the open Bull Put trades much safer. I also executed a second RUT Bull Put spread because my analysis concluded this was a very safe trade also. If the markets keep rising and will execute a few more Bull Put spreads with just under 2 weeks remaining.
We completed an Iron Condor trade on the SPX index last week with a Bear Call spread trade. This trade, 1475/1485, has a short option that is now 27 points from the current SPX Index price. The SPX Index could keep rising to new heights, and if this continues into next week, I will be closing this February spread and rolling to a new spread expiring in March. By rolling to a March spread, with more time, the bid premium collected should offset all , or the majority, of the debit incurred to close the February spread. I will email a detailed Trade Alert outlining the specifics of this rolling trade should it be needed. Of course, the SPX index could reverse direction. Looking at the SPX chart you can see that the current price is touching any resistance trend line drawn. The SPX will either break through this resistance making new highs or reverse direction.
I am creating Flash movie files with audio to illustrate my credit spread trades. If anyone has questions about how to process, close and adjust these trades please send me an email and I will do my best to send back a movie file illustrating the trade. I currently can illustrate these trades using TradeKing, OptionsXpress, and CBOE's Virtual Trading system. This file will be a zipped folder that must first be unzipped. Once unzipped you click the HTML file included in the folder. This HTML file should automatically be displayed in your internet browser. There is a set of play back control buttons at the bottom of the movie screen to control the video and audio.
We completed an Iron Condor trade on the SPX index last week with a Bear Call spread trade. This trade, 1475/1485, has a short option that is now 27 points from the current SPX Index price. The SPX Index could keep rising to new heights, and if this continues into next week, I will be closing this February spread and rolling to a new spread expiring in March. By rolling to a March spread, with more time, the bid premium collected should offset all , or the majority, of the debit incurred to close the February spread. I will email a detailed Trade Alert outlining the specifics of this rolling trade should it be needed. Of course, the SPX index could reverse direction. Looking at the SPX chart you can see that the current price is touching any resistance trend line drawn. The SPX will either break through this resistance making new highs or reverse direction.
I am creating Flash movie files with audio to illustrate my credit spread trades. If anyone has questions about how to process, close and adjust these trades please send me an email and I will do my best to send back a movie file illustrating the trade. I currently can illustrate these trades using TradeKing, OptionsXpress, and CBOE's Virtual Trading system. This file will be a zipped folder that must first be unzipped. Once unzipped you click the HTML file included in the folder. This HTML file should automatically be displayed in your internet browser. There is a set of play back control buttons at the bottom of the movie screen to control the video and audio.
Subscribe to:
Posts (Atom)