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Tuesday, March 19, 2019

Friday, March 15, 2019

May SPX Elephant

Trade Details:

4 May SPX 2600/2590 Credit Put spread @0.65 credit each
2 May SPX 2960/2970 Credit Call spread @1.00 credit each

2 May SPY 297 Long Calls @0.50 debit each

Friday, February 22, 2019

Off the Matrix for a week

Due to the aberration that is the American Health Care system, I’ll be traveling abroad to get some needed medical attention. Yes, even including flight tickets and the cost of a one-week stay in Cuba, it will all be far cheaper and without the permanent fear of unexpected billing surprises.

A sad state of affairs, no doubt, in the richest country on Earth. But it is what it is.

During that week, I won’t have Internet access. So, keep that in mind if you send me an email between February 24 and March 2. I’ll reply to your communications when I’m back.

Go to the bottom of this page in order to see the Legal Stuff

Friday, February 15, 2019

April RUT Elephant

Trade Details:

4 Apr RUT 1400/1390 Credit Put spread @0.65 credit each
3 Apr RUT 1675/1685 Credit Call spread @0.95 credit each

3 Feb IWM 165 Long Calls @0.64 debit each

Tuesday, February 12, 2019

Enhanced Investing - January 2019 Results

This article appeared first on
During the month of January, we got to close 23 Short Puts successfully for a total gain of $752 ($722.79 net after commissions). This is on a small $25,000 account (2:1 margin) with Tastyworks as the broker. Below is a summary of each position that was closed:

Tuesday, January 29, 2019

Disadvantages of Covered Calls

This article appeared first on
Despite the fact that a disciplined covered call strategy can out perform an equity index in the long run and do it with less volatility risks obviously exist as with any strategy.
  • When you sell a Call on a stock that you are holding, you are limiting your upside potential. It gets capped at the short strike price of the Call you sold, so you will not participate in an entire stock rally. However, you are still exposed to downside moves just as a regular shareholder.
  • When you are short Calls, you are also short volatility (Vega). A strong decline in the stock may actually make the Call more expensive or not lose that much value do to the expansion of volatility. Of course, this is irrelevant at expiration date when all that matters is whether the stock is above or below the strike price of the Call option.
  • Because it is an active strategy, profits are taxed at higher rates than say dividends or capital gains. This is something to take into account if you want to avoid active trading taxes. In that cases it is better to apply the strategy in tax sheltered accounts such an IRA.
  • Also, because it is an active strategy you will incur more trading costs than a pure passive Buy&Hold Investor. It is important for this reason to use a broker than charges reasonable commissions of less than $1 per contract and no Order Ticket charge.
All that said, Covered Calls help you mitigate your equity losses and can also provide regular cash flow. Evidence shows that a systematic Covered Call approach on the S&P500, selling the 30 delta Out of the Money Call every month while holding the underlying instrument, beats the index handsomely and with less volatility. Read this article about CBOE’s BXY index.
The disciplined investor will simply have to fight the frustration of missing huge rallies, knowing that for each one of those, there will be dozens of stocks doing nothing, sometimes for years. So, things tend to even out in the end and turn out a little better for the Covered Call seller.

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Tuesday, January 22, 2019

A Short Put Investment on SJM

This article appeared first on

Last week I finally closed a Short Put position on JM Smucker Co. (SJM) after a 42-day battle.
On November 30, the company closed at 104.51. My analysis told me that it was slightly undervalued and I decided to sell a January 95 Put for which I obtained a credit of $91. The broker froze a Buying Power of $1,335.65 for me to carry this short position.
After that, the market went to s**t, and SJM was no exception.