Conservative option strategies, what did you buy or sell today?

[fenders53]

(05-17-2020, 12:33 PM)NilesMike Wrote:

(05-17-2020, 10:59 AM)fenders53 Wrote: Did you miss the part that I am dumping the shares first, then immediately selling a new put a few bucks (or whatever) cheaper?  There are no new shares.  The same 100 I had (per contract obviously), unless the stock runs as I then incorrectly called the bottom.  I'm not averaging down a dog with additional new shares.

What's your exit strategy?  Just sell it and run?  I definitely do that sometimes if it makes sense.

And BTW I didn't know DAL was a sure dog at the time.

On speculative trades, yes. If it runs too far against me, I buy the put back (for a loss). I never get married to any of those underlyings.

If the put is sold for better entry on a stock which I like, I'll try to sell a covered call if the premium is acceptable. If the premium is too low, I will just sit on it and collect dividends.

I actually opened a new taxable account where I will be selling puts and covered calls in KO only, with all profits going to buy more KO shares.

I have a lot of puts open for KO right now.  I picked my strikes right and they keep expiring so no shares yet, but I am going to add more.  I am about to add more T and MO puts to the list as well.  I'd like to take some vacations in peace this summer and need to get even more defensive until fall.  

For the record, if you, Otter or Eric lived closer I'd tell my wife to seek advice from you if I were struck by lightning tomorrow.  Take that as a high compliment even if I argue with you guys for entertainment.

You and I can handle ourselves.  John scares me a little lol, and I really am trying to help.  At the risk of annoying him, I think he is still chasing a little too much junk in a sketchy market.  Specs are fun but it has to be a very small part of your game or you'll get burned soon enough.  Even 25% junk can wreck you so bad for years that you'd be better off in an index fund.  CV19 hurt me with only 10% spec when I happened to pick the wrong sectors.

[john]

Thats OK Fenders you are not annoying me. I am kinda like a kid in a candy store with my new found love of options.
And I always welcome to advice.
If you think I am chasing a little to much JUNK here you should see some of the bonehead moves I made when I 1st started.
I bought several High dividend paying CEFs everything was going real good until it didn't...

[john]

Had ADM PUT to me Friday @ $34.5 It ran up this morning so I sold 100 @ $35.52 then sold a put for 5/29 $34.50 strike for .50
What do you think, ok strategy or should I have let it possibly run more and collected the dividend?

[NilesMike]

(05-18-2020, 09:03 AM)john Wrote: Had ADM PUT to me Friday @ $34.5 It ran up this morning so I sold 100 @ $35.52 then sold a put for 5/29 $34.50 strike for .50
What do you think, ok strategy or should I have let it possibly run more and collected the dividend?

Strategy is fine if that was what you had in mind.

I get in trouble when, I change goals in midstream. Best for me is the plan of getting in and getting out BEFORE I put the trade on, when I deviate-no gouda.

[fenders53]

(05-18-2020, 09:03 AM)john Wrote: Had ADM PUT to me Friday @ $34.5 It ran up this morning so I sold 100 @ $35.52 then sold a put for 5/29 $34.50 strike for .50
What do you think, ok strategy or should I have let it possibly run more and collected the dividend?

That's pretty much the inverse of what I would likely do.  The market gave you the pop to sell a covered call and the stock goes ex-Div tomorrow.  Sorry if I caused that move.  Your basic plan is to sell a put and if you get assigned sell a call right?  A lot of people do that when the numbers works out.  

I tend to sell puts when a stock has a few down days, or is actually oversold and I think it might have some support.  If I can pick an expiration before an-Ex div I do that very often.  I can possibly grab put income, a dividend and shares near a price I picked.  Maybe even a covered call soon if it's just an income play and not a core DGI holding.  

I suspect ADM is going to drift lower in the near-term so it all may work out well enough for you in the end.

[fenders53]

John, if you see this before market close you could undo that ADM trade if you want the Div. It look's like a better day to sell an ADM call than a put. Disclaimer.... my crystal ball may be broken in the short-term so do what you are comfortable with.

[NilesMike]

(05-03-2020, 05:13 PM)NilesMike Wrote: I am doing something similar. I got rid of my speculative account, long story, and am going to just grind out wheel trades on quality dividend payers. Sell puts until I get the stock, then covered calls until it's called away. Rinse and repeat. Right now I'm on a CC with T. Sold the October 32 strike. If it's called away, max profit is 11.9% for 168 days. If not called it's 8% return, with capital risk. Should be able to grind out 12-15% a year on these.

My DGI portfolio is down about 11% from ATH, livable.

Closed the T-CC trade for 5% in 3 weeks.
Will wait for a nice down day to reposition.

Down about 1-2% from ATH account balances at the moment.

[fenders53]

(05-27-2020, 09:41 AM)NilesMike Wrote:

(05-03-2020, 05:13 PM)NilesMike Wrote: I am doing something similar. I got rid of my speculative account, long story, and am going to just grind out wheel trades on quality dividend payers. Sell puts until I get the stock, then covered calls until it's called away. Rinse and repeat. Right now I'm on a CC with T. Sold the October 32 strike. If it's called away, max profit is 11.9% for 168 days. If not called it's 8% return, with capital risk. Should be able to grind out 12-15% a year on these.

My DGI portfolio is down about 11% from ATH, livable.

Closed the T-CC trade for 5% in 3 weeks.
Will wait for a nice down day to reposition.

Down about 1-2% from ATH account balances at the moment.

That's great news with the SPY still down about 10%.  It's going to be a process for me to just match the market unless we finally get a real dip so I can deploy more cash.  I haven't shared many conservative option play details because it's boring to read, but I've done mostly what I said I would for months now.  I'm just grinding it out with a lot of puts sold on solid DGI stocks.  Very few have been exercised in this market though.  I am going very light on the covered call sales as that has failed me too often.  I still only have one account that is at a new ATH and it's nowhere near as large as my retirement account.

[john]

Sold a PUT on BTI 6/19 expiration
Has dividend on 7/9 if gets put to me

[NilesMike]

(05-28-2020, 08:44 AM)john Wrote: Sold a PUT on BTI 6/19 expiration
Has dividend on 7/9 if gets put to me

I assume 40 strike?

Why sell a put now, after this vertical runup that took out 2 swing highs?

[john]

I already own some BTI, I would like to own more
I am ok if it gets PUT to me.
I am also ok if it doesnt.
It would have been better to sell before the run up.
Nobody knows what the future holds, I have the track record to prove that lol

[NilesMike]

(05-28-2020, 09:24 AM)john Wrote: I already own some BTI, I would like to own more
I am ok if it gets PUT to me.
I am also ok if it doesnt.
It would have been better to sell before the run up.
Nobody knows what the future holds, I have the track record to prove that lol

All we know is where it's at right now and generally more advantage to sell puts in what appears to be a low point or after a run down.

The chart looked much better for that around 5/18 ish. One could have sold the 35 put for roughly what you sold the 40 put, incrementally a significant difference. Short term or long term.

Just sharing ideas.