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

[fenders53]

(01-12-2021, 07:05 PM)vbin Wrote:

(01-12-2021, 10:48 AM)fenders53 Wrote: Selling some UTE puts today.  The threat of higher interest rates will keep them down for while, but IMO rates will not get anywhere near high enough to make UTE div look like a bad income investment a few months from now.  If rates do rise that high we have trouble market wide anyway.  Sold DUK and XEL puts today.  May jump on AEP as well.  I already have some open on AEP and XEL because I nibbled in a few weeks too soon like always.  These will look better when the market finally gets rattled some day.   Sold a new MSFT put as well.  I've been trying to get back into MSFT for six months but so far just option premiums collected for my efforts.

I need to get into some Utes. I only have PCG. Sold out of duke, SO few others a while back. Checked today, they are still where they were. Lol thinking to sell ED and XEL puts tomorrow.

If you aren't excited about owning UTEs right now the XEL FEB 60s are my suggestion.  I doubt the in the money 65s will get you exercised but we never know.  DUK is always solid but I have no interest in SO at todays price.  There are better options IMO.  They have drama in the background I can avoid.  AEP looks good too though I'm not so sure their industrial customers are out of the woods.  They have the dirty Ohio politician stuff going on in the background but we probably would have heard by now if they were in trouble. They say they are innocent lol.  I own a ton of NEE but don't jump in now. There is no need to pay a big premium for a UTE right now. I sell NEE puts on a decent dip which doesn't happen too often.

In any event pick a UTE building out in the renewables.  No sense fighting the trend.  They still use lots of natty gas to feed your fossil fuel habit. 

[vbin]

(01-12-2021, 07:24 PM)fenders53 Wrote:

(01-12-2021, 07:05 PM)vbin Wrote:

(01-12-2021, 10:48 AM)fenders53 Wrote: Selling some UTE puts today.  The threat of higher interest rates will keep them down for while, but IMO rates will not get anywhere near high enough to make UTE div look like a bad income investment a few months from now.  If rates do rise that high we have trouble market wide anyway.  Sold DUK and XEL puts today.  May jump on AEP as well.  I already have some open on AEP and XEL because I nibbled in a few weeks too soon like always.  These will look better when the market finally gets rattled some day.   Sold a new MSFT put as well.  I've been trying to get back into MSFT for six months but so far just option premiums collected for my efforts.

I need to get into some Utes. I only have PCG. Sold out of duke, SO few others a while back. Checked today, they are still where they were. Lol thinking to sell ED and XEL puts tomorrow.

If you aren't excited about owning UTEs right now the XEL FEB 60s are my suggestion.  I doubt the in the money 65s will get you exercised but we never know.  DUK is always solid but I have no interest in SO at todays price.  There are better options IMO.  They have drama in the background I can avoid.  AEP looks good too though I'm not so sure their industrial customers are out of the woods.  They have the dirty Ohio politician stuff going on in the background but we probably would have heard by now if they were in trouble. They say they are innocent lol.  I own a ton of NEE but don't jump in now. There is no need to pay a big premium for a UTE right now. I sell NEE puts on a decent dip which doesn't happen too often.

In any event pick a UTE building out in the renewables.  No sense fighting the trend.  They still use lots of natty gas to feed your fossil fuel habit. 

Will check XEL trade. Can u suggest some names in renewables? I have traded NEE and ENPH puts in the past, following ur trades. Lol

[fenders53]

(01-12-2021, 07:38 PM)vbin Wrote:

(01-12-2021, 07:24 PM)fenders53 Wrote:

(01-12-2021, 07:05 PM)vbin Wrote:

(01-12-2021, 10:48 AM)fenders53 Wrote: Selling some UTE puts today.  The threat of higher interest rates will keep them down for while, but IMO rates will not get anywhere near high enough to make UTE div look like a bad income investment a few months from now.  If rates do rise that high we have trouble market wide anyway.  Sold DUK and XEL puts today.  May jump on AEP as well.  I already have some open on AEP and XEL because I nibbled in a few weeks too soon like always.  These will look better when the market finally gets rattled some day.   Sold a new MSFT put as well.  I've been trying to get back into MSFT for six months but so far just option premiums collected for my efforts.

I need to get into some Utes. I only have PCG. Sold out of duke, SO few others a while back. Checked today, they are still where they were. Lol thinking to sell ED and XEL puts tomorrow.

If you aren't excited about owning UTEs right now the XEL FEB 60s are my suggestion.  I doubt the in the money 65s will get you exercised but we never know.  DUK is always solid but I have no interest in SO at todays price.  There are better options IMO.  They have drama in the background I can avoid.  AEP looks good too though I'm not so sure their industrial customers are out of the woods.  They have the dirty Ohio politician stuff going on in the background but we probably would have heard by now if they were in trouble. They say they are innocent lol.  I own a ton of NEE but don't jump in now.  There is no need to pay a big premium for a UTE right now.  I sell NEE puts on a decent dip which doesn't happen too often.

In any event pick a UTE building out in the renewables.  No sense fighting the trend.  They still use lots of natty gas to feed your fossil fuel habit. 

Will check XEL trade. Can u suggest some names in renewables? I have traded NEE and ENPH puts in the past, following ur trades. Lol

Sadly when I sell puts , often you should be selling them ten bucks in the money lol. I am just too conservative.  I sold quite a few Enphase and Canadian Solar puts 50% ago, and it wasn't very long ago.  I am out for now unless the market corrects them back.  It will takes years of perfect execution to justify their prices now.  If you continue to play renewables, keep the expirations short and don't be greedy. Sell out of the money so you can bail without a huge loss.  They may in fact run like EV but as you know we are approaching delusional valuations.  I'm not that good at MOMO. 

That said, the safest renewable trades will be UTEs because nothing is left.  If the sentiment continues the market gets desperate to buy anything related that isn't stupidly run up.  A half dozen major UTEs fit that theme.  The crazy thing is the UTEs are actually making money on solar and wind now.  The high flyers are making very modest money and running to the sky.   My favorite pure play is ENPH.  Are they worth the already realized 100% gain going forward?  Obama administration was very pro renewables and the stocks that ran up were absolutely destroyed.  It was 10+ years too early.  Are we actually there yet?  We're certainly closer but I don't know.  Momentum sentiment and near term profitability are not the same thing. At some point the market will act surprised if profits don't come.

[fenders53]

Getting a little more serious about UTE plays. IMO the risk reward is there relative to this bull market for the first time in a long time for UTE options plays. My thesis isn't complicated. Rising interest rates are the current scare which is textbook UTE investing. If CD rates rise enough to truly make UTE yields look unattractive, the entire equity market is in BIG trouble soon anyway. I've been nibbling shares and selling puts on quality UTEs like DUK,AEP,XEL,WEC. They are volatile enough now that I have closed trades only 24-48HRs old for a 40% profit, then re-enter on the next dip that lately comes within days. The UTE premiums are about good as it gets short of an overall market in correction. I'll stick with quality UTEs with some renewables exposure. I've been selling puts in NEE that expire worthless, but it's in it's own growth stock stock world. I own plenty of NEE but the risk reward vs beaten down quality UTEs is not there for me, so no new money. I add to that when it goes down with tech and other growth stocks. I also own ALE which is rocketing higher. I won't get greedy and get sucked into that when there are conservative choices with better balance sheets and more upside potential IMO.

Just my two cents. Maybe interest rates do shoot higher due to excess GOV spending but I happen to believe they will manipulate them right back down to something the overall market can digest.

[fenders53]

Rolled my NEM and GOLD short puts forward. Even when I get the monthly direction somewhat wrong it's been a very reliable way to keep earning 1 1/2 - 2%/mo and often roll the strike some in my desired direction as well. Gold will never be a large part of my game but it adds diversification if the market crash ever comes and usually add monthly income short of a freefall in gold prices. If gold runs significantly higher I'll just cash out. I never bet on Gold going to the moon as those moves are more often then not a decade apart.

[Binary]

MAC 7.5 short put expires worthless today. Sold a MAC FEB 10 put now.
Closed a Jan22 T 26.5 short put with a nice profit and sold a Feb12 T 27 put.
My GPS short call expires ITM today so I can finally get rid of my 100 shares at a small profit (on top of all the option income)

[fenders53]

Closed out a nice trade on HD put at strike 255 EXP 1-22. Sold them on 1-4 for $249. Bought it back 11 days later for $18. Over 90% of max profit. I 'll have the $25000 extra collateral available for use next week. One of these days we;ll get a good dip. I've been saying that for awhile now.

-Sold a PFE strike 37 put expires next Friday for $63. I have a few more sold in the 36.50-37 range. This is an ex-div play for the week after. I trimmed my PFE position a few hundred shares in the $40 range after collecting the last div. PFE has been a slug for me for decades but the income game has made it a good one the past year or so when I am very careful with entry. I have several covered calls left but they are way out of the money. I wish those shares would get called away but it's not going to happen. PFE will be too low to sell new calls so I'll have to be patient.

Bought back my ENB strike 35 call that expires today and it's slightly in the money unfortunately. Gave up half my initial put sale proceeds and it was sold 40 days ago so nothing amazing. I got it exactly back and moved the strike up to $37.50 next month. I'm not trying to lose my high div yield stock too easily so this is a trade I will do with no hesitation. No new put income this month but it's my opinion ENB has a little room to run. ENB options are a game of inches for me. The premiums aren't that good but it you get it right 8 or so times a year it adds enough to the dividend for my time. If you can't move the next strike in your favor, or collect a new premium, or both, you are probably fighting a trade. That's my opinion anyway.

[vbin]

(01-15-2021, 02:57 PM)Binary Wrote: MAC 7.5 short put expires worthless today. Sold a MAC FEB 10 put now.
Closed a Jan22 T 26.5 short put with a nice profit and sold a Feb12 T 27 put.
My GPS short call expires ITM today so I can finally get rid of my 100 shares at a small profit (on top of all the option income)

Have you done any research on mac for a long position?

[Binary]

(01-15-2021, 04:02 PM)vbin Wrote:

(01-15-2021, 02:57 PM)Binary Wrote: MAC 7.5 short put expires worthless today. Sold a MAC FEB 10 put now.
Closed a Jan22 T 26.5 short put with a nice profit and sold a Feb12 T 27 put.
My GPS short call expires ITM today so I can finally get rid of my 100 shares at a small profit (on top of all the option income)

Have you done any research on mac for a long position?

Sure I have I am long MAC, the fair value is well above 10 usd in my opinion.

[fenders53]

Sometimes you just get a stock that keeps working for you. VSTO isn't too risky in my mind but option premiums are good enough to make it an attractive way to play it. I'm comfortable going long at 25 or less for a year or two hold. I've been selling 30 days options since September on VSTO.

In DEC sold FEB19 Strike 20 for $229. Option had 60 days to go. Option still has 30 days to expire and bought it back today for $31. It made no sense to hold it.

Same date I also sold a FEB 19 strike $17.50 for $124. Bought to close today for $21.

With positions closed I sold a strike 25 and a strike 22.50 with the same FEB19 expiration. Collected another $190 total.

This is pretty good mileage out of a low amount of capital. Before this I was selling them a little farther from the money and collecting about $110/mo per contract. Now if I can get one more dip because I only own 35 long shares so far. If the strike 25 will get in the money I can sell more puts where I'd really like to enter long. I suspect earnings will be too solid for that to happen.

This is how I prefer to enter a stock when things go well, with multiple option sells. A lot of times they run away of course and you're left sitting on your hands. I need a few more low dollar stocks because most of my efforts are more conservative large caps.

[NilesMike]

That is some rich premium from a "cheap" stock with low IV.

What's interesting is, I pulled up VSTO chart and laid the "abovethegreenline" parameters on it and WOW, one could have sold calls in downtrend and puts in an uptrend w/o an assignment for 5 years.

Was an eye opener for me, will continue to explore.

[fenders53]

(01-19-2021, 07:55 PM)NilesMike Wrote: That is some rich premium from a "cheap" stock with low IV.

What's interesting is, I pulled up VSTO chart and laid the "abovethegreenline" parameters on it and WOW, one could have sold calls in downtrend and puts in an uptrend w/o an assignment for 5 years.

Was an eye opener for me, will continue to explore.

I track them fairly close and can give you my thesis FWIW.  I would not call myself a gun nut, but retired military and my family target shoots.  Obviously we have political uncertainty for the foreseeable future.  "Gun huggers" start hoarding EVERYTIME they get worried.  Very cyclical charts that align with regime changes, social unrest, school shootings, and the subsequent rhetoric from politicians.  It's just panic buying.  It will happen but you might wait a year or two if you have a bad entry.  Around JUL I became convinced that Biden had a chance, and at the very least an election close enough to drive fear.  Anyway I started tracking/trading Ruger (RGR), Smith and Wesson (SWBI), and Vista Outdoors (VSTO).

The pure gun stocks have flown high of course.  I cashed out and the risk/reward isn't as good from here IMO.  They are however conservatively run and both RGR and SWBI may be totally debt free this year.  That's not a bad place to be and I will watch for a had dip. (and sell CCs if I get shares).  It will come eventually.  Ruger still has a four month wait list to get a common pistol.  I know that because I tried to order one for a Christmas present.      

VSTO may run with the gun stocks but I see a level of security for the following reasons.  They sell ammo which is frequently out of stock for popular calibers.   When gun enthusiasts get scared they empty the shelves.  When it gets too cheap they buy some more because they it will spike again when the mean DEMs come after my guns right?  Ammo hoarding is a obsession but we never know when the zombie apocalypse is coming.    VSTO just picked up Remington ammo when the brand went BK.  They now own a large % of the major brands at all price points.  They also own the best brand accessories like optics and cool Hollywood looking stuff.  They own some better brands in camping cookstoves and other outdoor sports.  What they don't have is a high exposure to stuff that could get restricted by the GOV.                                      

Don't forget we have a 6-3 SCOTUS.  I am not a bit afraid anything real happens and not afraid to own VSTO for years if necessary.  They will no doubt get hit when gun stocks do.  The company is still fairly valued and I will be highly surprised if they don't blow away earnings for at least a few more quarters, if not years.  I will watch their debt and hope they pick up some more yard sale pricing on quality brands.  I hate to make price targets but mine has been 33-35 for 2021 since they were trading at half that.  Seven analysts follow them and none of them are unconvinced.  I am really hoping some political chatter will scare the SP down before spring earnings.