Options Writing Trade Update - Apr 20

The ACH Apr 26 Call options got called out even though it corrected steeply (> 6%) on option expiry day last Friday as it stayed above $26. Thats the beauty of "at-the-money" call options. I am left with STLD & GG and get to write options again into May. In fact, it would be the 3rd cycle for GG. i.e I have written call options twice before & this would be the 3rd time against the same batch of stocks bought in Mar. As for May's options play, I wrote the May 18 Call for STLD @ 0.7 & the May 40 Call for GG @ 1.15. I also bought back some ACH stocks at an average of 26.2 & sold the May 26 Call option @ 1.2.
The fundamental picture is strong for equities and the news from the 1Q reporting season has been very supportive so far. I continue to maintain a cautiously positive outlook of the market in the short to medium term.

Current Trades:
STLD: Bought stock at $17.80, Sold the May 21 Call for $0.7
ACH: Bought stock at $26.2, Sold the May 21 Call for $1.2
GG: Bought stock at $38, Sold the May 21 40 Call for $1.15

Options Writing Trade Update - Apr 12

This week is options aspiration week. Alcoa kicks off the Q1 earnings reporting cycle on Monday followed by Intel on Tuesday and JP Morgan, Google and Bank America later in the week. This will set the tone for the following few weeks about the economy.
If there are no major earning disaster, I am hoping that the long stocks will all be in the money & the April Calls be called out & hence, leaving me with zero positions. This provides the perfect opportunity to lock in some gains and then take a renew look at where the market is going next before taking on anymore new positions. Moving forward in the next couple of weeks, any declines would be regarded as healthy corrections & will present good covered call opportunity as my current medium to long term view is still cautiously bullish.

Options Writing Trade Update - Mar

I took a break from writing for almost a year. Lets put it this way, I was involved in a project (extending my comfort zone) which was of higher priority & it totally consumed me. Now that the project has taken off, I have alittle more time to do this. In any case, the trading continues just minus the documentation.
For the last 12 months I have been capitalising on the market's sideways to cautious upward trend with covered call plays reaping profits(30%-40%) for all my clients (small funds). It appears that this trend may continue well into rest of 2010 but of course one should still exercise caution & care as with any strategy and minimise risk. Currently these are the positions I have:

STLD: Bought stock at $17.80, Sold the Apr 18 Call for $0.5
ACH: Bought stock at $26, Sold the Apr 26 Call for $1.0
GG: Bought stock at $38, Sold the Apr 40 Call for $0.95

By the way, I was caught by surprise about the announcement by ACH on their overall dismal performance for 2009 over the weekend. This has been factored into the share price & it appears that investors are looking beyond that & the recent Rio Tinto-Chalco deal + overall increase in Aluminium prices or some strong invisible force in the background lended some support to the stock. The following Monday, ACH rose by 1.51% at the close. I am watching this one closely.

Jan 14 Options Writing Trades Update

While the broad strokes are known, many factors remain unclear regarding how bad the economic situation will pan out for 2009. My mid term view (till June) about the market remains bearish to sideways trending. I will continue to sell calls into May & may dabble into a few near month Puts options where the situation permits. I wrote limited N225 Feb 5500 Put for 13 pts yesterday.

Nov 28 Options Writing Trades Update

US market was closed last night for the Thanksgiving holidays & as a result, Asian markets are relatively directionless Friday. If however , we have a good showing on Wall Street in the subsequent trading sessions when it reopens, Asia market will take their cue from Wall Street & follow suit. As such, it may present good opportunity to take another stab at the N225 Feb 13000 & above call options next week.

Nov 13 Options Writing Trades Update

The benchmark Nikkei shed 456.87 points (5.3%) to end at 8,238.64, falling for a third straight day Thursday. This following Wall Street's miserable performance where Stocks sank after the Treasury backed away from using its $700 billion bailout to mop up sour mortgages and added to uncertainty about how the government plans to revive bank lending. Dismal corporate news & forecast also added to the anxiety. With that, N225 Feb's call options are now ripe for the picking whenever there is a strong rebound. I am looking at the 13000 levels and above.

Nov 6 Options Writing Trades Update

For those who sold some calls in the last few days would have been rewarded today when investors refocus on the economy. Japan's Nikkei average fell more than 6.5 percent on Thursday as exporters were battered by a stronger yen, while fears about the economy fed by dismal U.S. data overcame euphoria after Obama was elected president. I picked up additional N225 Jan 14000 calls in the last few days for 20-25 pts.

Oct 29 Options Writing Trades Update

Stocks in Europe and Asia extended a global rally Wednesday as rate-cut hopes bolstered investors. Japan's Nikkei average climbed 7.7 percent in volatile trade. BOJ appears to be joining the bandwagon for considering rates cut too. Even if the BOJ did cut rates, that wouldn't improve economic fundamentals, leaving the market still at the mercy of supply and demand, and currency moves. Its more likely a technical rebound given that the market has oversold big time. I am not about to go back to the puts yet. Not yet.

Oct 27 Options Writing Trades Update

Tokyo's Nikkei 225 index, after trading higher in the morning, closed down 6.4 percent to 7,162.90. There is alot of panic selling & no one can predict the where the bottom is. Investors in Japan dumped exporters like Toyota Motor Corp. and Sony Corp. as the yen remained strong after hitting a 13-year high of 90.89 yen on Friday. The dollar stood at 92.70 yen, compared with 94.24 yen late Friday in New York. US futures are pointing to another steep negative opening on Monday....with is no respite in sight. Tuesday's U.S. Federal Reserve meeting was more cause for caution. The central bank is expected to lower interest rates by at least a half-point to 1 percent, though the rate reduction is already priced into the market and unlikely to calm nerves.

Oct 24 Options Writing Trades Update

Japan's Nikkei average slid 9.6 percent to a 5-½ year closing low on Friday, with exporters hit by the double punch of a Sony Corp profit warning and a sharply higher yen. The benchmark Nikkei lost 12 percent in the week and has fallen 50 percent so far this year. Looking to add Feb's call options whenever possible.

Oct 10 Options Writing Trades Update

Japan's Nikkei stock average dived 9.6 percent on Friday, its biggest one-day loss since the 1987 stock market crash, on growing fear the financial crisis will spark a global recession. The benchmark average's drop of 24 percent for the week was more than double the weekly drop right after the 1987 market crash. Panic selling ripples across global market as fears cascade. There is no end in sight. I wrote the N225 Jan 13500 Call & 13000 Call for 20 pts & 25 pts respectively.

Oct 8 Options Writing Trades Update

The Nikkei average plunged 9.4 percent on Wednesday, its biggest one-day drop since the 1987 stock market crash, as fear spread of a global recession. Panic & mayhem is all I can say. By the way, I got out of the Oct 10000 puts on Monday at 125 pts...where it was last done at 980pts. Being bearish bias, I sold the Jan 14000 call options for 15 pts today. I won't be touching the puts for a while as the market is simply too wild for a strangle play...if any will be a credit spread play.

Oct 2 Options Writing Trades Update

The Nikkei average slipped 1.9 percent to a three-year closing low on Thursday despite passage of a $700 billion financial bailout bill by the U.S. Senate, as growing fears about the global recession offset relief. Still holding my ground on the limited Oct Puts positions but with fingers ready to pull the trigger.

Oct 1 Options Writing Trades Update

Stocks in Japan and Australia bounced higher on Wednesday and the yen steadied as investors edged away from safety plays on hopes that a salvaged Wall Street rescue plan in Washington could keep global equities rallying. All eyes are now on how the saga will unfold. I am dugged deep on the Oct Puts & Dec Calls which are still vulnerable to huge swings.... not an ideal situation & will call for some intense trading.

Sep 26 Options Writing Trades Update

The benchmark Nikkei shed 113.37 points to 11,893.16, its lowest close since Sept 18. Trade remained on the light side throughout the week, with investors sidelined as negotiations about the $700 billion bailout plan fell into disarray after a contentious White House meeting. Nonetheless, the market biasness appears more towards the bill being passed with some sort of bail-out plan imminent. As such, we can see that the N225 Dec Calls are still pretty much holding their grounds much to my dismal. In the short term, its likely that there may be some relief rally, but then reality may set in thenafter as the economic conditions are very weak. I hope the reading is right of course. In any case, I dipped my toes back into the market today by selling some N225 Oct 10000 Puts for 20 pts.

Sep 18 Options Writing Trades Update

It was another nightmare on Wall Street last night as the stock market took another nosedive Wednesday with the American banking system appeared even shakier and investors worried that the financial crisis is spinning so far out of control that even government rescues can't stop it. Asian markets continue their plunge Thursday. I cut the N225 Oct 10000 puts & wrote the 9000 puts. This is not suitable for everyone.

Sep 17 Options Writing Trades Update

The Nikkei average rose 0.9 percent from a three-year low hit the previous day, after the Federal Reserve's bailout of American International Group worked to calm some of the turmoil ravaging Wall Street. However, its still too early to dip our toes back into the Puts so we may just sit tight & watch the market for a while more. How often do we see upheaval on Wall Street that led to storied institution filing for bankruptcy, forced buy-outs, central banks interventions. Totally wicked & unprecedented I must say. This will be one of the trading "war story" we tell our grandchildren. I reckon that the market is still very weak/fragile & can turn on a dime as we have seen over the past weeks & who knows what other skeletons we have in the Financial Sector's closet. Nonetheless, I wrote the N225 Dec 14500 call for 20 pts today. Only upon seeing more stability in the market, one can consider the Oct & Nov N225 Puts which are still attractive to recoup some of the losses. Meanwhile, I am submitting my bids for the Lehman Brothers coffee mugs on ebay....

Sep 16 Options Writing Trades Update

Following the meltdown on wall street last night, Asian markets continued the blood letting Tuesday. I squared off all the N225 Nov & Dec puts to prevent further damage & to keep profits intact. We shall have to wait & see how the situation pans out before we get back in. On days as such, its best to stay at the sidelines & watch.

Sep 8 Options Writing Trades Update

Monday saw "Strong" forces at play here that triggered a welcome rebound of the Nikkei, up a whopping 3.4%, erasing last Friday's losses by way of the U.S. government's bailout of mortgage finance companies Fannie Mae & Freddie Mac. It must be pretty desperate as the announcement came out over the weekends with folks working overtime. One cannot help but to feel that there were some over-arching agenda to shore up the slumping housing market and to ward off more global financial market turbulence but the question is what is it? How long can this last? Till after the presidential election in Nov? Your guess are as good as mine.

Sep 2 Options Writing Trades Update

The benchmark Nikkei ended down 224.71 points to 12,609.47, after gaining as much as to 12,920.52. For most of the day, the market moved in a narrow range. It showed little reaction to Prime minister Fukuda's abrupt resignation as investors were still grappling with its implication. I am looking to write the Dec's call options this or next week. Nov's put still looks attractive.