PSX cost me $101 when it was put to me. Late yesterday, I sold PSX 6.16.23 $105 strike calls(9 days, delta .19, OTM probability 81.8%) for $0.46 a share on a 100-share option contract. RoR was .46%, or 23.75% ARoR if I get the same results on this kind of trade 52 times a year.
Petroleum prices were rising yesterday. They're down a bit this morning. My strategy was to take a small RoR in the hopes that the stock will rise about 4% to over $105 and be called on June 16. The delta suggests that there is about 19% probability that that will happen.
Apple's VisionPro head set looks like a good deal at $3,500.
That is about half the $7,148 per Mac Plus price I paid in 2023 dollars in 1986 when the nominal price was $2,599. A new Mac Studio, one of the greatest computers you can buy, costs less than $2,000, not including the four monitors you can use with current versions and the six monitors that you'll be able to use with the new Mac Studio that was announced Monday.
AAPL: Nice upgrades to Mac Studio, Mac Pro and 15" MacBook Air. IOS and IOP new features aren't useful for me. Just more stuff to learn. I won't need to upgrade anything.
MAC OS Sonoma no big deal. I'll upgrade to get the new security that is always included with upgrades.
My MRK puts expired worthless on Friday. Cumulative premiums collected were $1.81. Bought MRK for $113.41 and sold MRK 6.30.23 $116 strike covered calls for $1.12. Net Debit is $113.41-1.12-1.81=$110.48. RoR is 0.99% times 15 trades a year gives a potential ARoR of about 14.42%. Dividend yield on net debit is about 2.64% if collected 4 times a year. Ex dividend is 6.14. If the stock is called before then I'll still get a 2.28% gain, or If I got that gain 25 times a year the ARoR would be about 57%.
CAT dipped to $222.90. I sold CAT 6.30.23 $200 puts (delta -.09, OTM probability 89%, IV 29.34%, margin of safety 10.3%. Options price was $0.90 per share. RoR 0.404% on 25-day trade. ARoR if trades like this get same result 12 times in the next 12 months would be about 5.9%.
On this trade, I sold CAT at a nice profit last year at $210. I want to buy it back for $200 or less. So the chance to buy the stock at a 10% discount is more important at this point than the ARoR.
I'm looking at selling puts on the stocks in this portfolio. I may do some today, especially if we get a real dip. Otherwise, income traders have to take the trades that are offered and trade more cautiously when premium prices are low as they are now.
Southern Co. (SO) is up this morning. When it was at $69.96, I sold SO 6.30.23 expiration $71 strike covered calls for $0.90 when the bid was $0.80 and the ask price was $0.95. RoR on the 25-day trade will be 0.58%. If I get the same results on the same kind of trade 15 times over the next 12 months, the annualized ROR would be about 18.5% plus about a 4% dividend if all the dividends are collected.
The price pop allowed me to use the $71 strike instead of the $70 strike I was considering yesterday. If SO is called, there won't be a gain on this trade, and I will sell puts again. This trade is in an IRA so the taxable equivalent returns are even higher than reported here.
Thanks Donald! Once again your analysis is much appreciated. The stocks you list are pretty much the same grouping that Jeff M worked with 3 years ago! Stodgy stocks was the term he used. I find all of them worth taking a look at. I have learned during these last three years to be careful of choosing stocks with high premiums/high risks!....PLTR is my best example! Throw PARA in there to! Have to get back to basics! But stlll holding on to SOFI! Thanks again.
@Brewmeister. Thanks again for the comment. Yes, I am using Jeff's strategy on this portfolio. He charged us $500 a year for his excellent service. Mine is still free. I do more puts trading than he did but he approved the puts strategy. If he hadn't died, I would still be a subscriber.
I might sell MRK puts on the dip. And I'm waiting to sell puts on CAT and ORCL when and if they dip.
PSX cost me $101 when it was put to me. Late yesterday, I sold PSX 6.16.23 $105 strike calls(9 days, delta .19, OTM probability 81.8%) for $0.46 a share on a 100-share option contract. RoR was .46%, or 23.75% ARoR if I get the same results on this kind of trade 52 times a year.
Petroleum prices were rising yesterday. They're down a bit this morning. My strategy was to take a small RoR in the hopes that the stock will rise about 4% to over $105 and be called on June 16. The delta suggests that there is about 19% probability that that will happen.
I'm waiting for a dip to sell puts, but ORCL continues to rise. CAT is up $3.16, which makes my sale of CAT $195 puts yesterday look pretty good.
Markets are stalled while speculators wait to see what the Fed will do with fed funds rates next week.
Apple's VisionPro head set looks like a good deal at $3,500.
That is about half the $7,148 per Mac Plus price I paid in 2023 dollars in 1986 when the nominal price was $2,599. A new Mac Studio, one of the greatest computers you can buy, costs less than $2,000, not including the four monitors you can use with current versions and the six monitors that you'll be able to use with the new Mac Studio that was announced Monday.
AAPL: Nice upgrades to Mac Studio, Mac Pro and 15" MacBook Air. IOS and IOP new features aren't useful for me. Just more stuff to learn. I won't need to upgrade anything.
MAC OS Sonoma no big deal. I'll upgrade to get the new security that is always included with upgrades.
My MRK puts expired worthless on Friday. Cumulative premiums collected were $1.81. Bought MRK for $113.41 and sold MRK 6.30.23 $116 strike covered calls for $1.12. Net Debit is $113.41-1.12-1.81=$110.48. RoR is 0.99% times 15 trades a year gives a potential ARoR of about 14.42%. Dividend yield on net debit is about 2.64% if collected 4 times a year. Ex dividend is 6.14. If the stock is called before then I'll still get a 2.28% gain, or If I got that gain 25 times a year the ARoR would be about 57%.
CAT dipped to $222.90. I sold CAT 6.30.23 $200 puts (delta -.09, OTM probability 89%, IV 29.34%, margin of safety 10.3%. Options price was $0.90 per share. RoR 0.404% on 25-day trade. ARoR if trades like this get same result 12 times in the next 12 months would be about 5.9%.
On this trade, I sold CAT at a nice profit last year at $210. I want to buy it back for $200 or less. So the chance to buy the stock at a 10% discount is more important at this point than the ARoR.
I'm looking at selling puts on the stocks in this portfolio. I may do some today, especially if we get a real dip. Otherwise, income traders have to take the trades that are offered and trade more cautiously when premium prices are low as they are now.
Southern Co. (SO) is up this morning. When it was at $69.96, I sold SO 6.30.23 expiration $71 strike covered calls for $0.90 when the bid was $0.80 and the ask price was $0.95. RoR on the 25-day trade will be 0.58%. If I get the same results on the same kind of trade 15 times over the next 12 months, the annualized ROR would be about 18.5% plus about a 4% dividend if all the dividends are collected.
The price pop allowed me to use the $71 strike instead of the $70 strike I was considering yesterday. If SO is called, there won't be a gain on this trade, and I will sell puts again. This trade is in an IRA so the taxable equivalent returns are even higher than reported here.
Thanks Donald! Once again your analysis is much appreciated. The stocks you list are pretty much the same grouping that Jeff M worked with 3 years ago! Stodgy stocks was the term he used. I find all of them worth taking a look at. I have learned during these last three years to be careful of choosing stocks with high premiums/high risks!....PLTR is my best example! Throw PARA in there to! Have to get back to basics! But stlll holding on to SOFI! Thanks again.
@Brewmeister. Thanks again for the comment. Yes, I am using Jeff's strategy on this portfolio. He charged us $500 a year for his excellent service. Mine is still free. I do more puts trading than he did but he approved the puts strategy. If he hadn't died, I would still be a subscriber.