Thanks Gilbert. I can't open you transaction link which shows trades. I am new to this group, so I appreciate your answers. Have you ever thought of doing this with LEAPS? ie like Joe's trades? If you have a stop loss on the short term call, you could do this with more leverage, right?
Not sure what your question is, Scott, but unfortunately taking losses are a part of all trading systems. The idea is to first limit losses and second, hope to participate with good stock selections moving with the trend.
Also, with a loss you don't *get* - but have to buy back the call premium. This premium has a time component that does decay the longer the position is held, so if you have to "unwind" the CC position very soon it costs you, but the closer toward expiration the loss is less.
Either way, if a position that moves against me is stock specific (not due to an adverse market condition/shift) I will find another to replace it and take in the lost premium and then some.
Mostly positions go ITM - barring the current (past 6-8 month) environment. I hope this helps and I look forward to your continued observations of my system.
G
--- In ConservativeOptionStrategies@ , Scott Meseck <srmeseck@...> wrote:yahoogroups. com
>
> I don't get this strategy. You seem to be placing a covered call and
> avoiding unlimited downside risk by placing a stop at the purchase price,
> less the money you get for the call. But most of the trades look like they
> went down, particularly during the first part of the year. So, if the
> delta on a covered call is say 50 and lets say you bought the stock for 20,
> sold the call for $1, with a stoploss at 19, wouldn't you trigger the
> stoploss at 19, but get about $.50 when you buy back the call? i.e., you
> just loss .50 on the trade?
>
> On Tue, Mar 23, 2010 at 12:02 PM, Gilbert <gilbert_arevalo@...>wrote:
>
> >
> >
> >
> >
> > We have entered week 4, since the recent rally confirmation or "Green
> > Light" on 01-MAR-2010, which dictates we enter a new position. This one will
> > be about 1/2 (~7.5%) the typical ~15-20% position allocation.
> >
> > This position from our watchlist has a good front-month premium and has
> > already reported earnings. Our entry could be better (with a breakout) so on
> > a pullback - with continued good market action we may ADD another 100 shares
> > near our stop-loss point.
> >
> > Tuesday, March 23, 2010
> >
> > 2:36 pm EST
> >
> > Bought 100 shares of CENX (Century Aluminum Company) at $15.26 (ask).
> >
> > Sold (1) CENX Apr 15 (CQL1017D15) call option contract at $1.00 (bid).
> >
> > Stop Loss: $14.26
> >
> > But, I'd really like for this to breakout and go further ITM.
> >
> > G
> >
> > --- In ConservativeOptionStrategies@ <ConservativeOptionSyahoogroups. com trategies%40yahoogroups. com >,
> > Gilbert Arevalo <gilbert_arevalo@> wrote:
> > >
> > > Friday's close also marked the expiration of our short March call option
> > contract.
> > >
> > > BCSI (Blue Coat Systems, Inc.) closed at $31.63.
> > >
> > > (1) BCSI Mar 30 (IYU1020C30) call option contract was exercised.
> > >
> > > 100 shares of BCSI were sold at $30.00.
> > >
> > > I will now update KCM Pro 2010.xls, since any volunteers for this CC
> > strategy haven't kept it up. Remember, anyone can download the excel
> > spreadsheet and try my strategy trades on for size (on paper or for real).
> > It is the easiest way for a newbie to get up-to-speed with covered call
> > investing and for the undisciplined investor to learn my rules. I've seen
> > intermittent higher returns and I've seen many scale back or quit
> > altogether, but this is very simple and consistent way to gain quite a large
> > average annual return - over multi-year periods.
> > >
> > > G
> > >
> > >
> > >
> > >
> > >
> > > _____________________ _________ __
> > > From: Gilbert <gilbert_arevalo@>
> > > To: ConservativeOptionStrategies@ <ConservativeOptionSyahoogroups. com trategies%40yahoogroups. com >
> > > Sent: Fri, March 19, 2010 8:18:21 AM
> > > Subject: [ConservativeOptionStrategies] Re: My 2010 CC Trades
> > >
> > >
> > >
> > >
> > > NUS finally succumbs to market distribution, triggering our "stop-loss"
> > target. With today's closing market losses, it will be the first sign of
> > clear institutional selling since the Nasdaq's confirmation - 15 sessions
> > ago.
> > >
> > > Friday, March 19, 2010
> > >
> > > 10:36 am EST
> > >
> > > Bought (1) NUS Apr 30 (NUS1017D30) call option contract at $0.55 (ask).
> > >
> > > Sold 100 shares of NUS (Nu Skin Enterprises, Inc.) at $28.28 (bid).
> > >
> > > G
> > >
> > > --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert"
> > <gilbert_arevalo@ ...> wrote:
> > > >
> > > > As the market continues to prove it's mettle to rally (and with NUS
> > hanging in there) - along with BCSI slated to be exercised after the close
> > tomorrow, we'll increase our CC portfolio exposure.
> > > >
> > > > Thursday, March 18, 2010
> > > >
> > > > 12:15 pm EST
> > > >
> > > > Bought 100 shares of VLTR (Volterra Semiconductor Corporation) at
> > $24.87 (ask).
> > > >
> > > > Sold (1) VLTR Apr 25 (QYU1017D25) call option contract at $1.00 (bid).
> > > >
> > > > Stop Loss: $23.87
> > > >
> > > > G
> > > >
> > > > --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert"
> > <gilbert_arevalo@ > wrote:
> > > > >
> > > > > Monday, March 15, 2010
> > > > > 12:19 pm EST
> > > > >
> > > > > Bought 100 shares of TRLG (True Religion Apparel, Inc.) at $29.41
> > (ask).
> > > > >
> > > > > Sold (1) TRLG Apr 30 (ZJQ1017D30) call option contract at $1.10
> > (bid).
> > > > >
> > > > > Stop Loss: $28.41
> > > > >
> > > > > G
> > > > >
> > > > > --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert"
> > <gilbert_arevalo@ > wrote:
> > > > > >
> > > > > > "Blue Coat Systems (BCSI) roared out of a cup-without- handle
> > pattern. Volume was triple its usual pace. It's now less than 3% past its
> > 31.15 buy point." IBD states in the recent TBP (The Big Picture).
> > > > > >
> > > > > > We entered BCSI last Tuesday and yesterday's NUS is also (now)
> > doing ok. Of course, the high-octane picks are entirely dependent on the
> > overall market trend - so we'll keep out strict stop rules.
> > > > > >
> > > > > > My Covered Call Candidates watchlist (see posting shortly) has a
> > couple of interesting biotech picks (which I avoid). But it has been a top
> > sector and AMLN and ITMN stand out.
> > > > > >
> > > > > > Apparently I can buy ITMN at 23.3 and sell the MAR 17.5 call for
> > $9. That'll give a "break-even" of 14.3 and a 13.73% return for a 1.8 week
> > holding.
> > > > > >
> > > > > > Very enticing - but I 'll avoid.
> > > > > >
> > > > > > G
> > > > > >
> > > > > > --- In ConservativeOptionS trategies@ yahoogroups. com, "Gilbert"
> > <gilbert_arevalo@ > wrote:
> > > > > > >
> > > > > > > Monday, March 8, 2010
> > > > > > >
> > > > > > > 11:03 am EST
> > > > > > >
> > > > > > > Bought 100 shares of NUS (Nu Skin Enterprises, Inc.) at $29.38
> > (ask).
> > > > > > >
> > > > > > > Sold (1) NUS Apr 30 (NUS1017D30) call option contract at $1.10
> > (bid).
> > > > > > >
> > > > > > > Stop Loss: $28.28
> > > > > > >
> > > > > > > G
> > > > > > >
> > > > > > > --- In ConservativeOptionS trategies@ yahoogroups. com,
> > "Gilbert" <gilbert_arevalo@ > wrote:
> > > > > > > >
> > > > > > > > Tuesday, March 2, 2010
> > > > > > > >
> > > > > > > > 10:35 am EST
> > > > > > > >
> > > > > > > > Bought 100 shares of BCSI (Blue Coat Systems, Inc.) at $29.94
> > (ask).
> > > > > > > >
> > > > > > > > Sold (1) BCSI Mar 30 (IYU1020C30) call option contract at $0.85
> > (bid).
> > > > > > > >
> > > > > > > > Stop Loss: $29.09
> > > > > > > >
> > > > > > > > G
> > > > > > > >
> > > > > > > > --- In ConservativeOptionS trategies@ yahoogroups. com,
> > "Gilbert" <gilbert_arevalo@ > wrote:
> > > > > > > > >
> > > > > > > > > This board became very active with the 2009 rally in stocks.
> > Now that we
> > > > > > > > > are in a correction, an important part of my long-term growth
> > strategy
> > > > > > > > > is to avoid new buys until a new rally is confirmed. As you
> > may have
> > > > > > > > > noticed I tend to invest with covered calls using growth
> > stocks. This
> > > > > > > > > only works during uptrends, which I can target very well
> > using IBD
> > > > > > > > > criteria. It is imperative to cash out once we reach our
> > stop-loss
> > > > > > > > > price.
> > > > > > > > >
> > > > > > > > > Just take a look at how many former leaders are fully tanking
> > into steep
> > > > > > > > > price loss. Right now "cash is king" - at least for my
> > approach.
> > > > > > > > >
> > > > > > > > > [The image
> > > > > > > > > "http://img215. imageshack. us/img215/ 2604/promp012210
> > .jpg" cannot
> > > > > > > > > be displayed, because it contains errors.]
> > > > > > > > >
> > > > > > > > > G
> > > > > > > > >
> > > > > > > > > --- In ConservativeOptionS trategies@ yahoogroups. com,
> > "Gilbert"
> > > > > > > > > <gilbert_arevalo@ > wrote:
> > > > > > > > > >
> > > > > > > > > > Thursday, January 21, 2010
> > > > > > > > > >
> > > > > > > > > > 11:00 am EST
> > > > > > > > > >
> > > > > > > > > > Bought (2) NANO Feb 12.5 (NTQBV) call option contracts at
> > $0.50 (ask).
> > > > > > > > > >
> > > > > > > > > > Sold 200 shares of NANO (Nanometrics, Inc.) at $11.02
> > (bid).
> > > > > > > > > >
> > > > > > > > > > G
> > > > > > > > > >
> > > > > > > > > > --- In ConservativeOptionS trategies@ yahoogroups. com,
> > "Gilbert"
> > > > > > > > > gilbert_arevalo@ wrote:
> > > > > > > > > > >
> > > > > > > > > > > Wednesday, January 20, 2010
> > > > > > > > > > >
> > > > > > > > > > > 9:30 am EST
> > > > > > > > > > >
> > > > > > > > > > > Bought (1) STEC Jan 19 (SQRAT) call option contract at
> > $0.70 (ask).
> > > > > > > > > > >
> > > > > > > > > > > Sold 100 shares of STEC (STEC, Inc.) at $17.83 (bid).
> > > > > > > > > > >
> > > > > > > > > > > G
> > > > > > > > > > >
> > > > > > > > > > > --- In ConservativeOptionS trategies@ yahoogroups. com,
> > "Gilbert"
> > > > > > > > > <gilbert_arevalo@ > wrote:
> > > > > > > > > > > >
> > > > > > > > > > > > Tuesday, January 19, 2010
> > > > > > > > > > > >
> > > > > > > > > > > > 10:31 am EST
> > > > > > > > > > > >
> > > > > > > > > > > > Bought 100 shares of STEC (STEC, Inc.) at $19.32 (ask).
> > > > > > > > > > > >
> > > > > > > > > > > > Sold (1) STEC Feb 19 (SQRBT) call option contract at
> > $1.45 (bid).
> > > > > > > > > > > >
> > > > > > > > > > > > Stop Loss: $17.87
> > > > > > > > > > > >
> > > > > > > > > > > > G
> > > > > > > > > > > >
> > > > > > > > > > > > --- In ConservativeOptionS trategies@ yahoogroups.
> > com, Gilbert
> > > > > > > > > Arevalo <gilbert_arevalo@ > wrote:
> > > > > > > > > > > > >
> > > > > > > > > > > > > Model Portfolio (15-Jan-2009) update:
> > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > > > G
> > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > > > ____________ _________ _________ __
> > > > > > > > > > > > > From: Gilbert <gilbert_arevalo@ >
> > > > > > > > > > > > > To: ConservativeOptionS trategies@ yahoogroups. com
> > > > > > > > > > > > > Sent: Tue, January 12, 2010 6:40:39 PM
> > > > > > > > > > > > > Subject: [ConservativeOption Strategies] Re: My 2010
> > CC Trades
> > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > > > Here is an example today of an "unwind":
> > > > > > > > > > > > >
> > > > > > > > > > > > > Tuesday, January 12, 2010
> > > > > > > > > > > > >
> > > > > > > > > > > > > 1:20 pm EST
> > > > > > > > > > > > >
> > > > > > > > > > > > > Bought (1) ASIA Jan 30 (EUJAF) call option contract
> > at $0.25
> > > > > > > > > (ask).
> > > > > > > > > > > > >
> > > > > > > > > > > > > Sold 100 shares of ASIA (AsiaInfo Holdings, Inc.) at
> > $28.60
> > > > > > > > > (bid).
> > > > > > > > > > > > >
> > > > > > > > > > > > > - Model Portfolio update:
> > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > > > G
> > > > > > > > > > > > >
> > > > > > > > > > > > > --- In ConservativeOptionS trategies@ yahoogroups.
> > com, Gilbert
> > > > > > > > > Arevalo <gilbert_arevalo@ ...> wrote:
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > With the start of 2010, my $20,000 Model Portfolio
> > update is
> > > > > > > > > as follows:
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > http://img710. imageshack. us/img710/
> > 6339/prompis. jpg
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > (test)
> > > > > > > > > > > > > >
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > http://yfrog. com/jqprompisj
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > Spreadsheet of trades and graph updates will
> > follow.
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > G
> > > > > > > > > > > > > >
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > ____________ _________ _________ __
> > > > > > > > > > > > > > From: Gilbert Arevalo gilbert_arevalo@ ...
> > > > > > > > > > > > > > To: ConservativeOptionS trategies@ yahoogroups.
> > com
> > > > > > > > > > > > > > Sent: Mon, January 11, 2010 11:40:33 AM
> > > > > > > > > > > > > > Subject: Re: [ConservativeOption Strategies] Re: My
> > 2010 CC
> > > > > > > > > Trades
> > > > > > > > > > > > > >
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > Monday, January 11, 2010
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > 2:11 pm EST
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > Bought 100 shares of ASIA (AsiaInfo Holdings, Inc.)
> > at $29.05
> > > > > > > > > (ask).
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > Sold (1) ASIA Jan 30 (EUJAF) call option contract
> > at $0.45
> > > > > > > > > (bid).
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > Stop Loss: $28.45
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > G
> > > > > > > > > > > > > >
> > > > > > > > > > > > > >
> > > > > > > > > > > > > >
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > ____________ _________ _________ __
> > > > > > > > > > > > > > From: Gilbert <gilbert_arevalo@ rocketmail. com>
> > > > > > > > > > > > > > To: ConservativeOptionS trategies@ yahoogroups.
> > com
> > > > > > > > > > > > > > Sent: Thu, January 7, 2010 12:38:28 PM
> > > > > > > > > > > > > > Subject: [ConservativeOption Strategies] Re: My
> > 2010 CC Trades
> > > > > > > > > > > > > >
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > Thursday, January 7, 2010
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > 3:27 pm EST
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > Bought 100 shares of VIT (VanceInfo Technologies,
> > Inc.) at
> > > > > > > > > $20.21 (ask).
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > Sold (1) VIT Jan 20 (VITAD) call option contract at
> > $0.75
> > > > > > > > > (bid).
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > G
> > > > > > > > > > > > > >
> > > > > > > > > > > > > > --- In ConservativeOptionS trategies@ yahoogroups.
> > com,
> > > > > > > > > "Gilbert" <gilbert_arevalo@ ...> wrote:
> > > > > > > > > > > > > > >
> > > > > > > > > > > > > > > Wednesday, January 6, 2010
> > > > > > > > > > > > > > >
> > > > > > > > > > > > > > > 9:45 am EST
> > > > > > > > > > > > > > >
> > > > > > > > > > > > > > > Bought 200 shares of NANO (Nanometrics, Inc.) at
> > $11.38
> > > > > > > > > (ask).
> > > > > > > > > > > > > > >
> > > > > > > > > > > > > > > Sold (1) NANO Jan 12.5 (NTQAV) call option
> > contract at $0.15
> > > > > > > > > (bid).
> > > > > > > > > > > > > > >
> > > > > > > > > > > > > > > Stop Loss: $11.23
> > > > > > > > > > > > > > >
> > > > > > > > > > > > > > > Sold (1) NANO Feb 12.5 (NTQBV) call option
> > contract at $0.75
> > > > > > > > > (bid).
> > > > > > > > > > > > > > >
> > > > > > > > > > > > > > > Stop Loss: $10.63
> > > > > > > > > > > > > > >
> > > > > > > > > > > > > > > G
> > > > > > > > > > > > > > >
> > > > > > > > > > > > > >
> > > > > > > > > > > > >
> > > > > > > > > > > >
> > > > > > > > > > >
> > > > > > > > > >
> > > > > > > > >
> > > > > > > >
> > > > > > >
> > > > > >
> > > > >
> > > >
> > >
> >
> >
> >
>
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