Archived Trades

Banking Is A Long Term Relationship

One of our previous calls has been PUTS and CALLS on JPM.  We’ve seen the stock move from $106 to $111 and today we see an opportunity to dollar cost average. The stock is trading in the $108.50 range. We are selling the June 21, 106 Puts. We believe that would be a good entry point for those not in the stock as well as a great dollar cost average play.

All investing involves risk, so Options Dojo can make no warranties or guarantees regarding our Sensei’s selections.  Invest with an awareness of your skills, experience and risk tolerance.  Options are not suitable for all investors and people can and do lose money.

Ring Ring, Call again

We recently encouraged our members to sell a VZ put and now we own that stock. WE are encouraging those who are in that trade to start selling calls every week at the strike price. As the market is up today we have a chance to dollar cost average on VZ. The stock is trading at 56.75 and we are selling the June 14, 56 puts. If they are put to us we will be lowering our average price in the stock. Also this morning we are sell the 6/14  $111 covered calls on JPM. This is another position that was put to us earlier at $109.

All investing involves risk, so Options Dojo can make no warranties or guarantees regarding our Sensei’s selections.  Invest with an awareness of your skills, experience and risk tolerance.  Options are not suitable for all investors and people can and do lose money.

Winner Winner

Last week we sold some JPM 109 puts, so today as we are close to expiration JPM moved above 109. We can out earning 2/3 of the premium. Good job to all of those who followed the Sensei.

All investing involves risk, so Options Dojo can make no warranties or guarantees regarding our Sensei’s selections.  Invest with an awareness of your skills, experience and risk tolerance.  Options are not suitable for all investors and people can and do lose money.

Get 6 While you wait.

This morning we are buying BP, it’s 13.50% off it’s yearly high. It pays a 6% dividend, so not much growth needed for a double digit return. Yes, some say the economy is slowing but we think the China and Mexico trade issues will resolve themselves. Oil will go back up in price, which is good for BP. So we are selling the June 14, $42 covered call today.  This trade has a potential 2.3% return, if called away.  Not bad for an 11 day trade, in line with our “a little bit more” strategy.

All investing involves risk, so Options Dojo can make no warranties or guarantees regarding our Sensei’s selections.  Invest with an awareness of your skills, experience and risk tolerance.  Options are not suitable for all investors and people can and do lose money.

Good Point Grasshopper

As I met with Grasshopper this morning we discussed the current trends and future plays for optionsdojo.com I noticed that Grasshopper made a good point. The portfolio is made up of number of shares of different positions, no matter the direction our number of shares don’t change (unless a split), and so we can take comfort in knowing that we can continue to sell covered calls on our positions. You see it takes 100 shares as a minimum to sell one option contract. So we can continue to sell the covered calls, even if the premium is less, we are constantly lowering our cost basis with every dollar of premium we receive.

All investing involves risk, so Options Dojo can make no warranties or guarantees regarding our Sensei’s selections.  Invest with an awareness of your skills, experience and risk tolerance.  Options are not suitable for all investors and people can and do lose money.

Selling In The Money Calls.

What we are referring to here is selling in the money calls against stocks you are acquiring in this volatile time. For example, we like JPM, it’s currently trading at $106, so if you sell the June 6, 104 you’ll get some premium to the positive and yet have some downside protection during that time. So the 104 is selling for 2.90 per share , this gives you $106.90 if called away. If the stock goes below $104, your basis in the stock is $103.10.

All investing involves risk, so Options Dojo can make no warranties or guarantees regarding our Sensei’s selections.  Invest with an awareness of your skills, experience and risk tolerance.  Options are not suitable for all investors and people can and do lose money.

Using the “right” tool.

Are you using the right tools to deal with this market? In other words how are you softening the blow to the downside or preparing for a future upside. Learning to use options as a tool can help. What if I said that you could win 66% of the time? Would that interest you? Well 66% of covered calls expire worthless. That is, the buyer of the call lost their premium to the seller. So if you want to learn how to sell covered calls, look to optionsdojo. Now is a good time to sell short term calls against your long term positions. The market could snap back with a trade deal but who knows, so sell calls way out of the money and collect that premium. If you are leveraging for an uptick you would be buying the calls. The key there is that you know how much you can lose, that is the price you paid for the option. So in some cases it may pay to be a buyer. As a buyer you don’t limit your upside but define your downside.

All investing involves risk, so Options Dojo can make no warranties or guarantees regarding our Sensei’s selections.  Invest with an awareness of your skills, experience and risk tolerance.  Options are not suitable for all investors and people can and do lose money.

Run Run, Run For The Hills

The Dow is down 5.60% for the month, the S&P 500 is down 5.80% and the Nasdaq is down 9.10%. So now what are you going to do? Jump from the ships deck? If you were a member of optionsdojo you would have learned to hedge your portfolio. By selling covered calls you would have been receiving premium to lower your cost basis, you would have learned to use collars to protect yourself, and you would know how to use PUTS for a stock replacement strategy. So let’s look at that strategy now. Keep in mind if your in a taxable account more consideration needs to take place. If you liquidate your positions but sell PUTS at lower prices what can occur? If the stock moves low enough you’ll own it again at a lower price. If the stock doesn’t you made money waiting. When is the last time you got paid for waiting? To learn more stay tuned for live advice on our platform.

All investing involves risk, so Options Dojo can make no warranties or guarantees regarding our Sensei’s selections.  Invest with an awareness of your skills, experience and risk tolerance.  Options are not suitable for all investors and people can and do lose money.

Adjust On The Fly.

If you’ve ever played baseball you realize that the outfielders don’t stand in place.  Neither do we as options buyers and sellers. At optionsdojo.com we look to dollar cost average where possible. So this morning we are looking at a negative opening. WE will be selling the JPM $106 puts with a 5/31 expiration. We do this to dollar cost average should JPM fall further. As one of the best managed firms in the country we are a buyer at the right place.

All investing involves risk, so Options Dojo can make no warranties or guarantees regarding our Sensei’s selections.  Invest with an awareness of your skills, experience and risk tolerance.  Options are not suitable for all investors and people can and do lose money.

Freeze! Tag you’re it.

When you were a kid if you played these games you know they had simple rules. You move and you’re out. You get tagged and you’re out. The options world has some simple rules. If you beyond a shadow of a doubt know that a stock is going to skyrocket, you should buy a call. If it’s going to plunge you buy a PUT. So what if you’re not sure? We suggest that the trend is your friend. If you have stock positions that would cause you to have big capital gains if sold but you don’t want to see your position decline, we encourage you to learn about collars. A collar is where you play both sides and in essence you freeze your position. The downside is that if you are wrong you’ll miss the upside. Here is an example. Let’s say you hold AAPL stock . It closed last night in the $178 range. So if you sell a call with a strike price of $180 and buy a put with a strike price of $176 you played both sides. The selling of the call gets you some premium and the buying of the put spends that premium. In many cases the premium here will be close. You may be able to get the call premium equal to the put premium and thus you protected your downside for little or not cost. Remember the caveat, you may lose the upside and your stock may be called away. We will be giving our members some collars to play for positions they may hold. Stay tuned for some ideas over the next few days.

All investing involves risk, so Options Dojo can make no warranties or guarantees regarding our Sensei’s selections.  Invest with an awareness of your skills, experience and risk tolerance.  Options are not suitable for all investors and people can and do lose money.