The Blue Collar Premium Stock reports list eligible candidates for both covered call writing and selling cash secured puts. These files historically contain between forty to sixty securities and our members have developed many innovative ways to make final decisions as to which securities will be included in the current month’s portfolio. In this article, I will use the report dated 6/19/2015 which was published at the start of the July, 2015 contract month. The list consists of sixty-nine candidates that have passed our rigorous fundamental, technical and common sense screens. I will demonstrate an example of one way to reduce this file down to thirteen candidates which can then be evaluated for option returns.
Overview of the 6/19/2015 Premium Stock Report (top portion shown)
- Yellow: Upcoming earnings reports during the July contracts and therefore not eligible until the reports pass
- Pink: Eligible candidates in bold showing the strongest stocks from a technical perspective
- Brown: Highlights candidates with current industry rank of “A”
Screens used in this hypothetical example
- Stocks in bold
- Industry rank of “A”
- Adequate open interest (second column from right)
- Price-per-share less than $100.00 (second column from left)
- Avoiding earnings reports (yellow field)
Screen results showing industry and stock
To reduce our file of sixty-nine eligible candidates down to thirteen will take the average retail investor between fifteen to twenty minutes and only needs to be done once a month. The next step is to check the option chains to make sure we can locate an appropriate number of stocks to populate our portfolio needs. For example, a $50,000 portfolio will have five stocks while a $100,000 portfolio will have between seven to ten securities. Many of us may have rolled options from the previous contract month and may need only a few stocks to fully populate our portfolios. The calculations and ensuing trade executions will normally take between one to two hours depending on investor experience and portfolio size. Once again, this second aspect is accomplished once a month. From there, we are in position management mode which can be automated by setting up limit orders based on our 20%/10% guidelines.
I plan to write articles in the future covering the calculations and final portfolio decisions.
There are a myriad of ways to use our Premium Stock Reports. In this article, I used bold stocks within industries currently ranked “A” as a starting point. These reports are geared to reducing the time it takes retail investors to set up elite option-selling portfolios.
***Premium members: Please use most current report.
Next live seminar
Greece’s uncertain status continued to impact global financial markets as the country edged closer to debt default and a possible Eurozone exit. There will be more clarity after the results of a public referendum on Sunday. Positive US economic data countered concerns about Greece and slower growth in China.This week’s economic reports:
- The US economy added 223,000 jobs in June, slightly below expectations of 230,000
- The unemployment rate fell to a seven-year low of 5.3% as labor force participation dropped from 62.9% to 62.6%, the lowest since October 1977
- Average hourly earnings were flat
- The National Association of Realtors’ index of US pending home sales rose 0.9% to a seasonally adjusted 112.6, the highest level since April 2006, a great sign for the US housing market
- According to the S&P/Case-Shiller 20-city index, US home prices rose 4.9% for the year ended in April, down slightly from 5.0% in March
- The Institute for Supply Management index of national factory activity climbed from 52.8 in May to 53.5 in June, the highest level since January
- Over the same period, however, US manufacturing purchasing managers’ index fell from 54.0 to 53.6, the lowest reading since October 2013
- The Conference Board’s consumer confidence index rose to 101.4 in June, up sharply from 94.2 in May and above the consensus estimate of 97.3
- Initial jobless claims rose 10,000 to 281,000 for the week ended 27 June, the 17th straight week below 300,000
- Continuing claims rose 15,000 to 2.3 million for the week ended 20 June
For the week, the S&P 500 fell by 1.21% for a year-to-date return of 0.87%.
IBD: Uptrend under pressure
GMI: 1/6- Sell signal since market close of June 30, 2015
BCI: Cautiously bullish but still concerned over situation with Greece which may become more defined on Sunday. Until this is resolved, I am selling an equal number of in-the-money and out-of-the-money strikes
Wishing you the best in investing,
Alan ([email protected])