ETF Covered Calls

What a bloody week, it’s good to be in mostly cash in my power account as planned and I’m focusing on selling naked puts on SSO right now as the market continues to dive.   I’m profiting by selling puts and keeping cash on hand until options expiry.  Here are this week’s ETF-Cashinator picks….    

ETF Covered Calls 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.

Boy it’s sure starting to feel like last summer but great market moves are a great time of volatility and an optimum time to earn some profits so I cranked up the ETF-Cashinator and here are the picks…….Lot’s of money to be made buying long and selling short in this market.

ETF Covered Calls 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.

Note: This is a Naked Put Trade!

I sold 2 SSOSM (July $65 Puts) for $1.65 to rake in about $320.00. This represents a 3% return with no capital investment except maintaining a capital reserve of $13,000 to fulfill a possible assignment.

How does this trade work? If SSO drops to $65 or less on July expiry (July 18th), I will be forced to buy 200 shares of SSO at $65 ($13,000 total). If SSO stays above $65 on July expiry, the options expire worthless and I keep the premium.

ETF Covered Calls 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.

Picked up 200 shares of SSO at $66.30 and sold 2 SSOGO (July $67 calls) to rake in about $400.   This represents a 3% return and upside of another 1% if I get assigned.

ETF Covered Calls 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.

Here is a break down of my positions after June expiry.

Arbitrage Account:

• Own 800 XHB @ average cost of $21.26 (400@22.72, 400@19.80), XXJFT expired worthless
• Own 400 DDM at cost of $74.30. DDMFX expired worthless

Mini Account:

• Own 200 DDM at $77.80, DDMFX expired worthless

Power Account:

• Assigned 1000 DXD at $57.00, account now holding cash.
• Own 200 QID at $46.75, Sold 2 QIDGU at $0.75

So what to do next? It’s a waiting game; Mini account will have to wait until DDM gets back up to at least $76 while arbitrage account will wait for XHB to pop up above $19 and DDM pops above $72. I’m holding a big chunk of cash in my power account and I may buy 200 share blocks of DDM and sell at-the-money calls over the next few days AFTER the Fed meeting but anything can happen.

ETF Covered Calls 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.

Sold 2 contracts on QIDGU for $0.75 to rake in about $150 in my power account.   I owned 200 shares on QID that I had purchased a while back.  This amount hits my 2% goal for the month so I took it.

ETF Covered Calls 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.

 What a week!  Dow finally plunges 200 points right after I had sold DXD calls short at $57 strikes instead of $60!  Oh well,  this was planned and with the Fed meeting next week, I definitely want to be in cash right now.  Overall still a profitable trade on DXD.   I’ll write up a follow up later detailing where I stand in all my account but for now, here are this week’s ETF-Cashinator picks…..

ETF Covered Calls 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.

Next week is options expiry and the Dow is gyrating all over the place. DDM and DXD looks profitable either way but here are this weeks ETF-Cashinator options…..

ETF Covered Calls 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.

Money never sleeps….. Bought 500 shares of DDM at $71.95 and sold 5 DMBFT (June $72 strikes) at $2.05 to rake in a little over $1000.00.  This represents a 3 pct return in just under two weeks!

ETF Covered Calls 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.

Lately, more and more people have expressed concerned about the down turn in markets and the viability of continued profits through ETF Covered Calls and I think too many people are missing the point. Here’s what my aggregate portfolio looks like right now:

Arbitrage Account:

• Own 800 XHB @ average cost of $21.26 (400@22.72, 400@19.80) current XHB @ $18.81 for paper loss of -$1,960.00
• Own 400 DDM at cost of $74.30. Current DDM is at $70.86 for a paper loss of -$1,376.00

Mini Account:

• Own 200 DDM at $77.80, DDM is at $70.86 for a paper loss of -$1,393.00

Power Account:

• Own 1000 DXD at $60.61, DXD at $56.05 for a paper loss of -$4,360.00
• Own 200 QID at $46.75, QID at $38.78 for a paper loss of -$1,592.00

These losses don’t include any profits made by shorting but if you add only the losses all up, it adds up to a little over $10,600 in paper losses. Am I in a panic about it? No, because markets don’t move up in a straight line just like they don’t move down in a straight line. Corrections will happen periodically and the point of the ETF Covered Call strategy is to be quasi long and short along the way to profit from the short periods.

Right now, I am VERY tempted to add more to my XHB positions (XHB July $19 strikes are trading at 5.8% premium right now) as well as go heavily into DDM as the Dow will inevitably pop sometime between Monday and a point in the future. What is that point in the future? I don’t know, it may be a week, or a month or a year but I know it will correct and pop back up. We have two more weeks before June Expiry and anything can happen during that two week period.

Lastly, if you have short term needs for the money you’re investing, DO NOT USE those funds for this trading strategy as market downturns can happen rapidly and unexpectedly.

ETF Covered Calls 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.