Stock Trading

[Del]

At 7:40, looks like SPX and CAVA are both in an exuberant mood this morning.

Definitely a good day to sell your call. Have fun watching it.

I'm just sticking with the call for now, and learn how it works You have 9/15 at strike 50?

I am holding a Sep 15 call at strike 50 which I sold when CAVA was at 42 on Fri, Aug 25. I got .36 premium.

[sweetandsour]

At 7:40, looks like SPX and CAVA are both in an exuberant mood this morning.

Definitely a good day to sell your call. Have fun watching it.

I'm just sticking with the call for now, and learn how it works You have 9/15 at strike 50?

I am holding a Sep 15 call at strike 50 which I sold when CAVA was at 42 on Fri, Aug 25. I got .36 premium.

The limit price had me for a minute. Eventually I found a pop-up that displayed bids, asks, mid-point, and the last premium value, (which was 0.45), so I just went with 0.45. Within minutes the bid had dropped to 0.35. My sell to open was good for today, and I'm sure it didn't fill, so I'll start over next week.
Looking back, I bought at 44.5, and could have sold at 45.5 and made $100 today. I was tempted, but was more interested in learning these options. I also should have bought BP first thing this morning and sold it this afternoon for another $50 of profit. But all is well; I'm an old dog learning new tricks.

[sweetandsour]

I'm just sticking with the call for now, and learn how it works You have 9/15 at strike 50?

I am holding a Sep 15 call at strike 50 which I sold when CAVA was at 42 on Fri, Aug 25. I got .36 premium.

The limit price had me for a minute. Eventually I found a pop-up that displayed bids, asks, mid-point, and the last premium value, (which was 0.45), so I just went with 0.45. Within minutes the bid had dropped to 0.35. My sell to open was good for today, and I'm sure it didn't fill, so I'll start over next week.
Looking back, I bought at 44.5, and could have sold at 45.5 and made $100 today. I was tempted, but was more interested in learning these options. I also should have bought BP first thing this morning and sold it this afternoon for another $50 of profit. But all is well; I'm an old dog learning new tricks.

Well, I think I've lost enough with CAVA and options to learn my lesson. I'm down 300 instead of being up 300, already out of the trade, and moved on. At least the loss was less than 10% and not all that painful if I don't re-purchase CAVA again.

[Del]

I spent most of Tuesday rebuilding my IRA.

I was in XLE and XLK. I had covered calls on everything, and they got called out on Sept. 1.

I picked seven stocks and ETF's. Purchased shares and then sold Sep 15 calls on everything.

I didn't go as aggressive as Mr. P. I got 0.6% premium overall by buying strikes that are a little higher than Mr. Piper might have chosen.

I already realize that I should have been more aggressive. September is historically and consistently the worst month for stocks. I should have favored my bets toward stocks being down a bit by Sept. 15.

The market is having a bad day, and my portfolio is down $5130 this week. But I received $2750 in premium, so net loss is -$2380. This is well within normal variation for an account of this size.

NVO (Nova Nordisk) is up today. Touching my call strike already. It turns out that I feel worse about missing out on some upside more than I do losing on a falling stock. I need to re-adjust my attitude.

[sweetandsour]

I need to re-adjust my attitude.

+1, maybe. Or maybe not. I'm not done with options yet, but I can see that it takes up more of my time than the one-off day trading I've been doing for the last couple of years. Things have to be just right for options to work out. I thought about keeping the CAVA, and keep sell calls, collecting a little premium here and there, but I can't see how small premiums every two weeks can keep up with a rapidly falling stock price. The price may come back, but I'm not waiting.

[Del]

I got my monthly dividend from JEPI. $68. WOO-HOO!

[sweetandsour]

I got my monthly dividend from JEPI. $68. WOO-HOO!

I saw an article last week, in Barrons or maybe NYT, describing how someone sank the bulk of their funds in JEPI, and used the monthly dividend to make their monthly mortgage payment.

[Del]

I got my monthly dividend from JEPI. $68. WOO-HOO!

I saw an article last week, in Barrons or maybe NYT, describing how someone sank the bulk of their funds in JEPI, and used the monthly dividend to make their monthly mortgage payment.

If a guy has $160,000 lying around and he's looking for some way way to put it to work -- in JEPI, it will reliably throw out $1000 per month. Perhaps that cash horde is doubling as his emergency savings fund -- two years worth of living expenses, or something like that. This could be a prudent choice for a guy in the right position!

JEPI produces reliable returns, currently at 7.2%/year, with little risk to underlying principal.

My trading account it at $80k now. I have 200 shares ($11k) in JEPI. Mostly, it serves as my emergency trading cash fund.

I try to keep $15k in cash, in case my option trades need some defensive adjustments. It's hard to do, because I expose myself to a lot of risk. (I am currently at $12k cash.) And it's tempting to buy something cheap, which often takes my cash down lower than I want it to be. Thus I have cash, and I have an emergency cash reserve in JEPI.

[MrPiper]

I am holding a Sep 15 call at strike 50 which I sold when CAVA was at 42 on Fri, Aug 25. I got .36 premium.

The limit price had me for a minute. Eventually I found a pop-up that displayed bids, asks, mid-point, and the last premium value, (which was 0.45), so I just went with 0.45. Within minutes the bid had dropped to 0.35. My sell to open was good for today, and I'm sure it didn't fill, so I'll start over next week.
Looking back, I bought at 44.5, and could have sold at 45.5 and made $100 today. I was tempted, but was more interested in learning these options. I also should have bought BP first thing this morning and sold it this afternoon for another $50 of profit. But all is well; I'm an old dog learning new tricks.

Well, I think I've lost enough with CAVA and options to learn my lesson. I'm down 300 instead of being up 300, already out of the trade, and moved on. At least the loss was less than 10% and not all that painful if I don't re-purchase CAVA again.

Hi S&S. I get your concern with CAVA. I too am down a lot, but just a thought. How many times have I owned a stock that went well up and then came back down, or went down and came well back up. I buy companies that I believe in for the long run. CAVA is such for me but may not be for you. That's ok either way. I am "down" a few thousand $ on CAVA in UNREALIZED gains because I still own the stock. I have also made a few K on calls. All in all, I am down about 5%. I just continue to write the calls because I personally believe in the long run it will not only come back, but do so with a lot of growth. We will see.

The whole purpose of covered calls is to hold and make money. Sometimes you lose a little growth on a big upward swing. Sometimes you lose a little value on a downward swing as you see right now, but if you hold the stock on the downward, you continue to make money along the way. Unless the company goes under (which is rare but can happen) it will stabilize and you continue to make money all a long and eventually make your money back. If you wish to sell out as in this case w CAVA, you run the same risks with most stocks.

All this said, if you want lower high and low risk you will get less premium for you calls. BP is my personal go to for that. It moves like a giant turtle, pays a 5% dividend along the way, and yet has a lower premium but I keep it in the pile.

[sweetandsour]

The limit price had me for a minute. Eventually I found a pop-up that displayed bids, asks, mid-point, and the last premium value, (which was 0.45), so I just went with 0.45. Within minutes the bid had dropped to 0.35. My sell to open was good for today, and I'm sure it didn't fill, so I'll start over next week.
Looking back, I bought at 44.5, and could have sold at 45.5 and made $100 today. I was tempted, but was more interested in learning these options. I also should have bought BP first thing this morning and sold it this afternoon for another $50 of profit. But all is well; I'm an old dog learning new tricks.

Well, I think I've lost enough with CAVA and options to learn my lesson. I'm down 300 instead of being up 300, already out of the trade, and moved on. At least the loss was less than 10% and not all that painful if I don't re-purchase CAVA again.

Hi S&S. I get your concern with CAVA. I too am down a lot, but just a thought. How many times have I owned a stock that went well up and then came back down, or went down and came well back up. I buy companies that I believe in for the long run. CAVA is such for me but may not be for you. That's ok either way. I am "down" a few thousand $ on CAVA in UNREALIZED gains because I still own the stock. I have also made a few K on calls. All in all, I am down about 5%. I just continue to write the calls because I personally believe in the long run it will not only come back, but do so with a lot of growth. We will see.

The whole purpose of covered calls is to hold and make money. Sometimes you lose a little growth on a big upward swing. Sometimes you lose a little value on a downward swing as you see right now, but if you hold the stock on the downward, you continue to make money along the way. Unless the company goes under (which is rare but can happen) it will stabilize and you continue to make money all a long and eventually make your money back. If you wish to sell out as in this case w CAVA, you run the same risks with most stocks.

All this said, if you want lower high and low risk you will get less premium for you calls. BP is my personal go to for that. It moves like a giant turtle, pays a 5% dividend along the way, and yet has a lower premium but I keep it in the pile.

Thanks MP. Question: Do you continue to sell calls when the current stock price is lower than your purchase price? If so, do you always keep the strike price above your purchase price?