Comments on: Executing Trades Based on Ex-Dividend Dates https://www.thebluecollarinvestor.com/executing-trades-based-on-ex-dividend-dates/ Learn how to invest by selling stock options. Thu, 09 Nov 2017 13:58:07 +0000 hourly 1 By: MarioG https://www.thebluecollarinvestor.com/executing-trades-based-on-ex-dividend-dates/#comment-135766 Thu, 09 Nov 2017 13:58:07 +0000 http://www.thebluecollarinvestor.com/?p=16080#comment-135766 Trading Experiences through 11/8/17

Week 3 of 4 Exp.Fri 11/17
Tuesday – 11/7:
** QQQ (Sold Last price 153.69) – Unwound 100 shares Covered Call Strike 149 Purchased 9/20/172 cycles back (rolled up and out OTM Exp. Friday 10/20) Strike 149. Net results: Net Investment $14,900. Net ROO-Gain 2.77% or $401.50 with Cost Basis $144.98.

* After Gap up time value was approaching 0.30 with is 0.2% of the Strike. I start looking to unwind when I saw 0.1% to 0.2% in Time Value BTC loss, especially in the 3rd week, since i would have to look to at least 1% (Alan’s recommendation to make it worthwhile) plus the closing loss in a new security. With a strike of 149, 0.1% = is 0.15 or $15 per contract.at 0.1% or $30 per contract at 0.2%. (In actuality, thinking back, it is more correct to say 0.2% is 0.28 using my Cost Basis, which is a constant). My actual BTC loss was 0.26. It is amazing that you can use the Time Value predict and trade over $15,000 and have a closing loss of $0.26 per share or $26 net, but the numbers show that.

** New Investment SOXX: Looking for a new trade, since this is m ETF or low risk account I went through the ETF Report and found SOXX ETF paying an ROO% of 1.45% Week 3 of a 4 week cycle. By the time I filled my order the price of SOOX rose (trading downside protection for profit) and filled 100 shares at 177.58 Strike 177 Net ROO = 1.2%. That amounts, based on cost basis of 177, to $212.40 additional profit this cycle, losing on $26 by unwinding QQQ in Week 3.

Notice that had my original net investment had been $10,000, ROO% of 1% is only $100.00. 1.2% $120.00 (Profit then would be $94) and the closing BTC cost becomes more significant and should direct you t finding a higher interest security.

Commission comments:
Notice also I did not include any mention of commission for the above trade. That’s because that was none essentially. I only paid FINRA, Regulatory fees of 0.36 (Sell QQQ)) , 0.04 (BTC QQQ), 0.05 STO.QQQ) Total $0.45 net. When I opened up the Joint Trust Account with Fidelity with $50,000, their free trade offer was commission free for 2 years.

With my other accounts at Fidelity and OptionsHouse/Etrade, I do pay commissions so the analysis has to include the effect on your cost. With Fidelity a Covered Call (2 legs) for 1 contract is $5.60 ($4.95 plus 0.65 per contract). The same trade at Etrade is $10.40 (4.95 per leg plus $0.50 per contract, With 5 contracts the numbers are $8.20 and $12.40 respectively. With 1 contract per share cost is $0.056 with Fidelity and $0.104 with Etrade. Those costs can be significant when determining at what price to close and open up a new trade.and it totally depends on your Cost Basis (Strike or Purchase price) and the number of shares in your trade. That is why I am now preferring trades with 200 or more shares to lower the commission cost effect on my trades.

.*****
Wednesday 11/8:
PYPL: Gap up, Unwound at a BTC loss of 0.2%. Found TER with a good chart, which was paying 1.4% OTM, and 1.65% including share appreciation to the strike.

Mario

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By: MarioG https://www.thebluecollarinvestor.com/executing-trades-based-on-ex-dividend-dates/#comment-135706 Wed, 08 Nov 2017 22:08:18 +0000 http://www.thebluecollarinvestor.com/?p=16080#comment-135706 In reply to Alex.

Alex,

I have the Cash Secured Puts book as well. I also highly recommend, if you do not have it, Alan’s Classic Encyclopedia which covers Covered Calls and has other related investing information.

Good luck with you investing.

Mario

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By: Alan Ellman https://www.thebluecollarinvestor.com/executing-trades-based-on-ex-dividend-dates/#comment-135683 Wed, 08 Nov 2017 16:03:48 +0000 http://www.thebluecollarinvestor.com/?p=16080#comment-135683 In reply to Marsha.

Marsha,

Holding a stock through an earnings report is risky and not part of our BCI methodology. However, there are times when we have confidence in a positive report based on historical precedent. In those cases, the option is written after the report passes and any post-report volatility subsides.

Alan

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By: MarioG https://www.thebluecollarinvestor.com/executing-trades-based-on-ex-dividend-dates/#comment-135670 Wed, 08 Nov 2017 13:53:11 +0000 http://www.thebluecollarinvestor.com/?p=16080#comment-135670 In reply to Barry B.

I will connect when time is available, to Schwab and try out their capabilities. Thank you for describing them very thoroughly. If I find some goodies I will report back.

From what you describe, Fidelity is the only that allows, in addition, to your account positions (just like Schwab), use of watchlists to function also as portfolios with complete purchase, quantity information for both Stocks and Options. And the watchlists are accessible from the Active Trader Pro platform as well as from the browser or their Mobile App.

Mario

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By: Justin https://www.thebluecollarinvestor.com/executing-trades-based-on-ex-dividend-dates/#comment-135657 Wed, 08 Nov 2017 12:16:45 +0000 http://www.thebluecollarinvestor.com/?p=16080#comment-135657 In reply to MarioG.

Having just filled out the Schwab application myself (dozens of pages filled with mysterious acronyms and dense legal jargon) I’ve come to the conclusion that you Americans have way too many lawyers. Do yourselves a favor and fire 99% of them into space – the world will be a better place for it! 😛

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By: Roni https://www.thebluecollarinvestor.com/executing-trades-based-on-ex-dividend-dates/#comment-135655 Wed, 08 Nov 2017 12:01:07 +0000 http://www.thebluecollarinvestor.com/?p=16080#comment-135655 In reply to Jay.

Hello Jay,

good to see you.

The market is very difficult to read.

Alan is slightly bullish, with 3 OTM and 2 ITM, and I am trying to do the same.

AAPL had great results with all their products and numbers. I suspect they will be greater stil this holiday season, and the stock may reach 200.00 again.

Cheers – Roni

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By: Marsha https://www.thebluecollarinvestor.com/executing-trades-based-on-ex-dividend-dates/#comment-135633 Wed, 08 Nov 2017 09:58:49 +0000 http://www.thebluecollarinvestor.com/?p=16080#comment-135633 Alan,

I’ve been trading with NVDA for over 4 months since it first appeared on your stock list. I sold it briefly before the 8/10 earnings report and that turned out well as the stock dropped quite a bit after the report. I bought it back a week later and still own it as it has again appreciated, over 100 points in 4 months. With the earnings due on 11/10 my question is when is the best time to sell? Or should I take a chance and hold through the report and sell the option after the report?

Thanks,
Marsha

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