Saying goodbye to an old friend…
June was a bittersweet month for me.
I sold a $3 call against CLF with no intention of rolling if it looked like the stock was going to be called away. Sure enough, as the option expired on June 17th CLF closed at $4.91 marking the end of an era for CLF and me.
If you’ve followed my trading for the past couple of years, you know CLF and I have a love/hate relationship full of roller coaster highs and lows, but it’s finally come to an end…sort of.
Since I’ve gotten to know CLF so well, I’ve decided to continue to sell puts against it and play my chances at the “Wheel of Fortune” with it. We’ll see how this strategy progresses, however I already sold and closed out one put and have another in the game.
As for the rest of the month, I think I did pretty well. It was another “up” month for me and sets up the longest winning streak I’ve had with trading.
My other trades were either covered calls on TRN or selling a put against NE. Nothing too spectacular to be honest, but continually selling when volatility is high for the individual stock is working pretty well.
I didn’t pay particular attention to volatility with my TRN trades. Those are just recurring covered calls against the 100 shares I own. In a similar manner to CLF, I don’t plan on rolling those if they look like they’ll expire ITM.
I got into TRN at such a high cost basis, that I’ll gladly let those go to get in at a lower level. I could sell a put against TRN and average down my cost basis but I won’t for a couple of reasons.
First, it wouldn’t really help out all that much. It would probably only lower my basis about ~$10 which would put me around $30. Second, it would eat up a lot of my cash reserve and buying power which would mean fewer trades over all and impact my ability to generate any income.
So, with these thoughts in mind i’m selling covered calls against it until it gets called away. I know there are a host of other ways to go about lowering my cost basis on the stock besides just selling calls or averaging down, however I’ve decided to just let this run its course.
That sums it up for this month!
I hope your trading is going well and I’d love to hear from y’all. Feel free to drop me an email at firstname.lastname@example.org, leave a comment on the site or catch me on Twitter @optionstudent.
Until next month!
June Net Option Trading Income: $160.64
June Dividend Income: $7.07
Total June Income: $167.71
Total 2016 Net Income: $535.33
Current Dividend Stock/ETFs Holdings
|Symbol||# Shares||Quarterly/Monthly Dividend Per Share||Annual Dividend Per Share||Cost Basis||Yield||Pay Month|
|JNK||10||$.189 (monthly avg)||$2.27||$33.95||6.68%||M|
A = (Jan/Apr/Jul/Oct)
B = (Feb/May/Aug/Nov)
C = (Mar/Jun/Sep/Dec)
M = Monthly
June Dividend Payments
|Stock/ETF||Total Dividend Paid|
June’s Option Trades
|Strategy||Stock/ETF||Option||Entry Price||Exit Price||Commission||Net Profit||% Gain/Loss||# Lots|
|P||NE||Jun 16 $9 Put||$.42||$.18||-$3.07||$20.93||57.14%||1|
|CC||CLF||Jun 16 $3 Call||$.34||$0||-$18.08||$49.92||100%||2|
|CC||TRN||Jun 16 $18 Call||$.65||$.25||-$3.07||$36.93||61.54%||1|
|P||CLF||Jul 16 $5 Put||$.52||$.23||-$3.07||$25.93||55.77%||1|
|CC||TRN||Jul 16 $19 Call||$.45||$.15||-$3.07||$26.93||66.67%||1|
CC = Covered Call
P = Sold Put
-Rx = Roll #X from previous trade