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

[fenders53]

(02-20-2019, 02:31 PM)crimsonghost747 Wrote:

(02-20-2019, 10:08 AM)Kerim Wrote: Do you guys track your options performance in any formal way? If so, how? I figure it is easy enough to track the return on any individual trade, but across trades where a small percentage of the puts you sell are exercised, how do you determine overall return? Seems you can only measure against hypotheticals ("well, I would have bought it at X, so the fact that the shares were put to me at Y, and commissions were Z, so I gained / lost Q....").

As a pure trading strategy, it's easy enough to calculate as I'll get an entry and exit price, usually not more than a week or two apart. Add the premiums, commissions, possible taxes and you should be done.

Now if you use a put to enter a long term position with no plans of letting go off the shares, then it might be a bit more complicated. But I guess then you should count it like you do with the rest of the portfolio that has unrealized losses/gains. Buy price is X, premium is Y, current price is Z so Z + Y - X = unrealized profit. It's no different than the rest of your holdings.

You'd really have to do as Crimson has stated and isolate the option.  Then isolate entry and exit for the stock.  The other part is where we debate.  I think it's a big deal to get into every position a little cheaper as that savings can be invested.  He contends we miss being long in some stocks that will run to the moon and we missed the bus.  In fairness that's a defendable position.  With this current six week market run you could have outperformed my income strat by just being long, and cashing out some shares about now.  But the market is still down some since I started this with a high volume of put positions.  I am not down through all this.     

Not to repeat myself, but for me it's total option premiums received, minus the few I bought to close out through the month, minus commissions.  That is cash in the account I can split into other investments.  Call it what you want but I am re-investing a lot of it into shares of whatever, so it's a form of DRIP in my mind.  Option premium or a dividend is cash money right?  I own a lot of DGI as well and it does it's DGI thing over time I hope.   I find every way I possible can to diversify, including my strategies.  I would never commit all my money to and idea.  But this is the golden method of entering position Crimson.  Don't ever forget that Mike and I are right lol.

I had to run off to work this AM but Mikes goal of 1 1/2% monthly is more reasonable.  I mentioned a couple 3 1/2% months during the past 6 months.  Here is how that happened.  JAN was a straight up month and it was just easy as you could sell a put almost in the money and it was worthless in a matter of a week.  OCT-NOV was very volatile and acting on the extreme dips was instantly rewarded in many cases.  I sold puts in AAPL, MMM, HD etc.  Stock would launch and you could buy it back for a lucrative profit, then recycle the money into another put sale a week later.  Yes this is just trading but a few stocks were cooperating fully.  The opportunity presented itself repeatedly and there was little logic in sitting on a highly profitable position for another 3 weeks for little reward. It was not likely the put would ever exercise so far out of the money.  I was forced into plenty of long positions through all this so no regrets.  I have a long list of stocks I want to own long the next year or two.  I'll probably let the market decide which order as long as I am somewhat diversified.  I'm inclined to keep doing this strategy until it fails me.  Some of my long positions took a horrible beating and this kept me in the green except DEC.  Only way you were green in DEC is if you were shorting everything.