ETF Covered Calls

All this government meddling in free markets is really getting me down. Here are this weeks ETF-Cashinator picks but I’m still hanging on to cash until after the Fed meeting. Markets always seem to rally at the end of a quarter so I’m expecting the market to tank over the next week or two but since next week is a holiday week, I’d expect the downturn to happen the latter.

This website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

Rich Slick’s ETF-Cashinator™ Quick Reference Guide is now available. These are all my favorite ETFs. The sheet is broken down into three sections.

• Section 1 includes all ETFs which have options trading available, volume of 100k+ shares traded daily, broken down by categories: Indexes, Financials, Health Care, Energy, Commodities, etc.
• Section 2 includes Leveraged (2x) ETFs broken down by Indexes and Sectors
• Section 3 includes Shorting (1x & 2x) ETFs broken down by Indexes and Sectors

Click here to get PDF.

With the turmoil in the credit industry and the looming Fed meeting in Mid September it’s simply too uncertain for me to get back in the game right now.  The ETF-Cashinator™ and ETF-Putinator™ though keep cranking out some prospects.  What’s new this week is my new ETF-Cashinator:Currency™ which takes a look at currency ETFs and covered calls and naked put action on it.   I’ve got the major ETF currencies in the report:  Yen, Euro, Sterling, Swedish Krona, Swiss Franc, Loonie and Peso.  Check it out. I’ll post a new page which describes the report headers some time next week.

 
This website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

I just sold EEB for $37.55 which is a nickel above from where I bought it originally. I’m officially sitting 100% cash until the September Fed Meeting.

This website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

So if you panicked and lost money this week by selling or feel you lost out on the rally, I’m going to tell you that the ups and downs are irrelevant if you have a plan in place to profit on the upswings and downswings.   Now that the market is closed, my UNG calls definitely will be called and I pocketed $400 on that deal.

On the “down” side, EEB closed at $35, shy of the $38 strike so those calls expire worthless and I hang on to the 300 shares of EEB.  But that’s not where it ends because as I write this, I can see that EEB September $38 strikes are trading for $0.50 and the December $38 strikes are trading for $1.95.   So if I sell September calls on 300 shares I’m looking at $150 (1.3% return in 33 days) or if I sell December $38 calls, I’m looking at $595 in cash (5% return in 120 days).

What am I doing with EEB?  I’ll hang on until EEB recovers back to $37 or $38 and see how the September options are doing.  I suspect it’ll bump up to $36 next week.  I’ll settle for 2% return over the next 30 days so we’ll see what happens.

In the meantime, I will sit on cash in the rest of my accounts.  Absolutely nothing has changed with regards to the subprime mess.  All the Fed did was pour gasoline on a hot fire and the danger is that much more threatening now.   For the year, I’m up 15% and I plan on keeping that money.   Keep in mind that there is 100+ billion in ARMS adjusting in October and that’s when the real fireworks begin!

If you insist on checking out Septembers ETF Covered Call action, do so along with the ETF Naked Puts.  The Puts will give you an idea on where all the negative sentiment is right now.

This website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

Luck or skill? You decide but it looks like the 1000 UNG shares I bought last week at $39.60 will be assigned as UNG is now trading at $44.80 (as I write this) so that means I’ll be forced to sell my shares at $40.00. This means I’ll be making about ~$400 this week during this “turbulent” market in addition to the $1200 I made last week. Remember, ETF CoveredCalls allows me to earn a profit when markets are excitedly up (like UNG) and when markets are down (like EEB).

Speaking of EEB, it is currently trading below the $38 strike calls I sold so this means that I’ll have an opportunity to hold on to EEB and sell September or December calls at the $38 strike.

Later after the markets close, I’ll power up the ETF Cashinator to see what the best deals are for September. I hope you’ll tune in later….

This website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

Another bloody week on Wall Street but I’m not worried, I made about $1500 for the week which isn’t too shabby. The PPT, Fed, ECB, and BoJ are pumping billions into the system to keep the party going. It’s like a few kegs of beer arrived late into the night as the party goers were thinking of turning in and a whole new round just started. We’ll be good at least through August Expiry in my opinion.
I feel sorry for any bag holders so I’m publishing the ETF-Cashinator along with the ETF-Putinator so you can see where the best potential opportunities and potential pitfalls might be over the next few months.

This website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

I just picked up 300 shares of EEB in my mini-account and sold August $38 calls for $0.65 to rake in $180 in cash.  No biggie but I only have around 13k in my mini-account so not much I can do with it.  This represents 1.7% return in under 7 days since options expire next week.  If I get called at 38, I’ll earn an additional $105 and boost my return to 2.7% and if my options expire worthless, I’ll look to sell September 38 calls currently trading at $1.75 for an additional 4.7% return!

This website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

I picked up 1000 shares of UNG at $39.60 and sold the August 40 calls at $1.25.  This represents a return of 4.17% return in less than a dozen days if I get called and a 3.2% return if I don’t get called.   Using Buy/Write strategy, I profit from upswings by automatically liquidating my position(s) [e.g. getting called] and I profit from down swings by letting my call options expire worthless and keeping the premium.

This website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.

Another bloody week on Wall Street.  Dow plunges 240 points late today!  From the infamous 14k down to nearly 13k it’s been sad to say the least.  I’m still sitting entirely in cash.  The fed meets next week on August 7th.  I’m not sure what they’ll say because they are really caught between a rock and a hard place.   If they lower rates, the US Dollar will be worth less than toilet paper.  If they raise rates, the USD will recover but we’ll have economic mayhem as the housing and lending (e.g. Financial) markets tank.  I’ll write more about this on Monday but things are in pretty bad shape.

Lots of opportunity for money to be made if you have the stomach for it.  I’m sitting tight on my cash until after the fed meeting to see how things are going to go….

This website is for educational and entertainment purposes only. Any investment activity is not without risk including loss of principal. Neither this website nor its authors assume any responsibility arising from the use or misuse of any information presented in this blog. You are urged to contact a financial adviser before making any investment decisions. Past performance is no indication of future performance.