3/29 Daily Summary

No NDX Iron butterfly in place right now, the covered calls are working out ok with this recent up move.

3/28 Daily Summary

No major market change Today, I'm interested to see what happens next, are we going to find some footing here or come back down? Volume doesn't seem very convincing..

3/24 Daily Summary

First and foremost, let me go out and say it: I'm glad I'm not in the APR butterfly right now.. Look at this 30 day st. deviation chart, for about a month we have had 1 large day just about every other day.. This means a lot of adjusting to stay in the trade, in fact, the position I considered entering this week would be already undergone a cut and roll.

I'm in the process of re-evaluating all my trading, pros and cons, and the fact that with the newborn baby I want to spend some time with my family. I'm a firm believer that your trading style needs to match your lifestyle and personality. With a new baby and additional responsibilities at work, I'm finding the simple cash-secured put/covered call strategy a blessing from the sky.. :)

A reader posted a few good questions on my last posting, so let me repeat them here and address them to all:
What type of returns do you look for in your naked puts?
About 1 to 1.5% over the value held in margin. For a current position, I've sold the 72.5 vall on COST for about .70c, it is a bit below my goal, but since I was assigned COST last month, I wanted to start writing the calls anyway.

Overall, I'm looking to get about the same or better results as the market, with reduced volatility by selling the calls and puts to bring money into the bank when the stocks are moving side-ways.

Why naked puts over just buying the stock?
I start with selling a naked put, then I let it be assigned into stocks. Once I own the stocks I start selling the covered call. First of, you need to select the stocks you would like to own right away. Then, but selling extra premium with options you bank some money every month and reduce your down-side risk on the stock.

Isnt the margin and downside risk almost the same yet your participation on the upside is capped?
Yes, it is, the upside is capped, but I'm not looking to do this strategy on fast-moving stocks. My goal is to select a few stable stocks that I won't mind owning and keep selling premium every month, so while it seems the upside is capped, because you "refresh" everything, you essentially bring money every month regardless of what the stock does.

3/23 Daily Summary

Just a brief update Today, I don't have my usual NDX Iron butterfly on as I have decided to take a break on the APR cycle. I have started a few covered call/cash-secured put trades, my plan is to do something very simple this month and repeat it moth after month on the long-term portion of my portfolio. This is actually working well as I am working with my wife on this very simple strategy, it is good to have her engaged on this, a great partnership for sure!

3/21 Daily Summary

I didn't get int the market Today because the gap at the opening. I may just sit it out this month after all, since there is quite a bit of activity going on right now in the market as you can tell by the daily price spikes, we have just about 1 large move every other day for a few weeks now.

3/20 Daily Summary

A couple of quiet days, I'm considering getting into the APR position early Monday. Looking at the charts as we speak, it seems like the down-side draft is not quiet over yet. We'll see.

3/16 Daily Summary

I have not started the APR position yet. To be quite honest I may just sit it out this month, give myself some time to regroup. The market seems to need some of that time out as well, notice the last 2 days have been really aggressive, Yesterday with a big gap down and Today with a crash down in prices. I'm glad I'm out to say the least.. Let's see how this market behaves moving forward.

A big thank you to the readers that posted their support on my last month's trading accident. I've basically gone back to flat in my 1-year performance, which is a big pain... Like I said, I need to spend the time and review play by play this MAR position as well as all my past trades to recognize the issues and lessons learned before jumping in the water again.. I find that back testing and journal review is a good way for me to build up confidence. I've been having very busy week days, so plan on doing it over the weekend. For now, will keep watching the day by day market action as I do have a few cash-secured puts/covered call positions I'm working on for the long-term portion of my portfolio.