Comments on: Covered Call Writing: Types of Customer Orders https://www.thebluecollarinvestor.com/covered-call-writing-types-of-customer-orders/ Learn how to invest by selling stock options. Sat, 31 Mar 2012 18:26:46 +0000 hourly 1 By: Barry B https://www.thebluecollarinvestor.com/covered-call-writing-types-of-customer-orders/#comment-5369 Sat, 31 Mar 2012 18:26:46 +0000 /?p=5705#comment-5369 In reply to Suresh.

Suresh,

I love collars…they have saved me on numerous occasions.

Barry

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By: Suresh https://www.thebluecollarinvestor.com/covered-call-writing-types-of-customer-orders/#comment-5368 Sat, 31 Mar 2012 16:49:57 +0000 /?p=5705#comment-5368 In reply to Barry B.

Very well done, Barry.
This is what Alan referrers as hitting the double. I have a position on LULU as well, save that I did not see the support at 20 day EMA, so I decided to buy a long put and collar the stock.
If the trend continues up than I shall close the long put.
Regards
Suresh

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By: Barry B https://www.thebluecollarinvestor.com/covered-call-writing-types-of-customer-orders/#comment-5362 Sat, 31 Mar 2012 01:37:12 +0000 /?p=5705#comment-5362 Example of using trend lines/20 day EMA…

BCI community,

Here is a good example of using the technical tools that Alan teaches…in this case, the use of the 20 day EMA.

3/27/12 – Entered trade for LULU
– BOT stock at $75.01
– STO Apr $75 call (ATM) for $2.52
– Initial return of 3.3%

Over the next two days, LULU was dropping. However, in reviewing LULU’s chart, the 20 EMA has been acting as solid support recently. When LULU was hovering at the 20 EMA, I BTC the call.

3/28/12 – Bought back April $75 call
– BTC Apr $75 call for $1.70
– Net on a one day trade of $0,82 or 1%
LULU bounced off of the 20 EMA today…back to the $75 area

3/30/12 – Re-sold the Apr $75 ATM call
– STO Apr $75 call for $2.50
– Initial return of 3.3%

Net so far in the trade is approx. 4.4% with three weeks for the trade to run.

So, a few take aways…
[1] The moving averages can act as support (per pg. 48 in Alan’s
new book)
[2] The price action took advantage of Beta…in LULU’s case, the
beta is 1.37, so it is somewhat more volatile than the market in
general (S&P 500)
[3] A few minutes spent looking at the chart and historical price
action yielded an additional 1% return in a very short time

Best,

Barry

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By: Suresh https://www.thebluecollarinvestor.com/covered-call-writing-types-of-customer-orders/#comment-5361 Fri, 30 Mar 2012 20:59:08 +0000 /?p=5705#comment-5361 In reply to Alan Ellman.

That makes a lot of sense, Alan.
Many thanks
Suresh

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By: Alan Ellman https://www.thebluecollarinvestor.com/covered-call-writing-types-of-customer-orders/#comment-5360 Fri, 30 Mar 2012 20:57:03 +0000 /?p=5705#comment-5360 In reply to Suresh.

Suresh,

Your idea makes a lot of sense. Selecting stocks from the best-performing industries is a BCI requirement. There is a way of accomplishing this with the premium stock report alone. On the “running list” (pages 3-6 of the report) we list the industry segment rank for each stock. What you can do is select only those equities with ranks of “A” or perhaps “A’ or “B”. See the screenshot I created below:

Keep up the good work!

Alan

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By: Suresh https://www.thebluecollarinvestor.com/covered-call-writing-types-of-customer-orders/#comment-5357 Fri, 30 Mar 2012 14:48:51 +0000 /?p=5705#comment-5357 In reply to Alan Ellman.

Hi Alan

I was wondering if it is possible to do the “top down analysis” using the information we get from the premium site?

My idea is that we get a report on ETF from your team around this time. I think we can use that report to see which sectors are performing best. Then on Sunday, we get the weekly stock screen. So, the methodology is to select the sectors from the first email on the best performing ETF, then select the stocks that are in that sector from the second report. Of course the BCI investor does not to have more than 20% of the portfolio in any one sector, so if I want 5 stocks, then simply select 5 sectors and select one stock from each of these sectors from the weekly stock screen.

Please give me your views on this idea. It sounds very simple but then why does it have to be complicated? Based on this thinking, is it possible for you to name 5 sectors that you would be happy to have the stocks from?

Many thanks
Suresh

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By: Alan Ellman https://www.thebluecollarinvestor.com/covered-call-writing-types-of-customer-orders/#comment-5356 Fri, 30 Mar 2012 10:36:06 +0000 /?p=5705#comment-5356 Running list stocks in the news: ALLT:

This is a small-cap computer (bandwidth) related company based in Israel. In the past 5 earnings reports there have been POSITIVE surprises of 100%, 20%, 14%, 57% and 20%. Recently year-to-year sales growth was reported @ 36%. As a result ALLT has outperformed the S&P 500 by 37.5% over the past year. Our premium watch list shows an industry segment rank of “A” and a beta of an aggressive 1.71 (not for extremely conservative investors). Below I constructed a chart based on our BCI methodology depicting the bullish technicals (click on chart to enlarge and use the back arrow to return to this blog).

Alan

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