Follow My Covered Call and Naked Put Trade Strategies

May 06 – Closed Two Naked Put Option Trades Profitably. Established a Partial Covered Strangle

On Thursday I bought back the SLB and NEM naked put options that I had sold earlier. I paid $0.07 for the SLB puts resulting in a 90% annualized profit and I paid $0.10 fr the NEM puts resulting in a 27% annualized profit. The average annualized return on my most recent 20 closed naked put trades is 31%.

I opened a covered call trade on Qualcomm on May 05 and today I sold some naked puts (fewer than the number of calls I sold) to establish what I refer to as a partial covered strangle. It is my way of generating more income with my capital.

May 07 – Sold Naked Puts on Snap

May 07 – Initiated Covered Calls with NRG Energy

On Friday afternoon, shares of NRG passed one of my covered call screens so I purchased shares and then sold an equal number of Jun-18 $36.00 calls and Jun-18 $37.00 calls. The premium I received was $1.25 and $0.90 respectively.

All the best in trading and in life.

...

Covered Calls

Income-Generating Trades Initiated with Qualcomm and Lyft

Wednesday May 5, 2021

I initiated two trades today that generated income by selling option premium: one covered call and one naked put.

Qualcomm Covered Call

Qualcomm has been passing one of my covered call screens recently and now that the quarterly earnings report has been released, I decided to buy shares and then sell near-the-money Jun-18 $135.00 calls. If the price of Qualcomm closes above $135.00 on June 18, this trade will generate an annualized return of 24%.

Lyft

Late in today’s trading session, I sold naked May-21 $47.50 puts on Lyft for $0.63 which sets up a healthy potential annualized profit of 27%.

If you jump over to my Open Trades page, you will see that I have active covered call trades on twelve stocks and naked put trades on four stocks. Most of the covered call trades are currently positioned to provide the maximum trade profit which is, on average, 44% annualized. That gives me a warm fuzzy feeling but I have to remember that paper profits are just that.

...

Covered Calls

Option Trades with Barrick Gold (GOLD), Shell (RDS.A) and Twitter (TWTR)

Monday May 3, 2021

I just checked my email subscription list and see that I have new subscribers from the U.K., Australia, and the U.S. Welcome aboard. To all my email subscribers, I am considering cutting back on the number of emails that I send but there is an issue with that. I don’t want to bombard you with an email every day but the purpose of me posting every day that I trade is to display honesty. If I only post on the weekend with a summary of trades opened and closed during the previous week, I could leave out any newly opened trades that went south right at the outset. If I post each day that I trade, there is essentially no opportunity for that. At this point, I am struggling a little with my thoughts on the pros and cons of the number of posts I publish and therefore the number of emails I send out. If you have an opinion you would like to share with me on this, please contact me at fredjpenney@gmail.com.

As I have little time to post at this time of the year (i.e. construction season in Canada), I am simply going to present my tables for trades initiated today.

Barrick Gold OTM Covered Call

The table below presents a summary of three sets of calls that I have sold on Barrick Gold since May 26. Today, I sold May-21 $22.00 calls for $0.80.

Royal Dutch Shell OTM Covered Call

Twitter Naked Put

...

COVERED CALL POSTS

Trades for the Week Ending May 07, 2021

May 10, 2021

May 06 - Closed Two Naked Put Option Trades Profitably. Established a Partial Covered Strangle On Thursday I bought back the SLB and NEM naked put options that I had...

Income-Generating Trades Initiated with Qualcomm and Lyft

May 5, 2021

I initiated two trades today that generated income by selling option premium: one covered call and one naked put. Qualcomm Covered Call Qualcomm has been passing one of my covered...

Option Trades with Barrick Gold (GOLD), Shell (RDS.A) and Twitter (TWTR)

May 3, 2021

I just checked my email subscription list and see that I have new subscribers from the U.K., Australia, and the U.S. Welcome aboard. To all my email subscribers, I am...

Covered Calls

Covered Call Trades Initiated With Chevron and Gilead Sciences (CVX, GILD)

May 1, 2021

After Chevron and Gilead Sciences reported their quarterly earnings, the share prices of both companies fell. Chevron closed the Friday session down 3.6% and Gilead Sciences was down 0.6% but...

Covered Calls

Covered Call Initiated With Bristol-Myers Squibb (BMY)

April 30, 2021

Bristol-Myers Squibb announced its quarterly earnings prior to the market opening today and the reaction wasn't pleasant. At the end of the trading session, BMY was down 4.8%. That price...

Covered Calls

Covered Call Initiated With Eli Lilly (LLY)

April 27, 2021

The stock market reacted negatively to Eli Lilly's earnings report today pushing the share price down 2.7% at the close. That price action led to Eli Lilly passing one of...

Covered Calls

Closed Covered Call With AMD

April 25, 2021

Shares of AMD closed on April 23 at $82.76 which was well above the $77.00 strike price on the calls I sold on April 13 for $3.70. Accordingly, my shares...

Covered Calls

Early Assignment of CVS Shares

April 24, 2021

On April 01, I set up a covered call trade with CVS shares by purchasing the shares at $74.34 and then selling slightly OTM Apr-30 $74.50 calls. CVS had an...

Covered Calls

Covered Call Initiated on Schlumberger (SLB)

April 23, 2021

With Schlumberger's earnings report out of the way and no knee-jerk reaction in the stock price, I bought shares in SLB at $25.65 today and then sold OTM May-21 $26.00...

Covered Calls

Covered Call Trade Initiated in Citigroup (C)

April 20, 2021

I have to say at the outset that opening a covered call trade today felt uncomfortable. For me, it feels like the stock market has had an excellent run and...

Covered Calls

Results of Call Options That Expired on April 16

April 17, 2021

I had eight covered call trades for which the call options expired yesterday and six of the stocks closed higher than the strike price so those stocks will be assigned...

Covered Calls

Covered Call Trade Initiated with Morgan Stanley (MS)

April 17, 2021

Yesterday, I purchased shares of Morgan Stanley and immediately sold ITM May-21 $77.50 calls for $2.70. With the expected April 29 dividend of $0.35, if the shares are assigned at...

Covered Calls

Covered Call Trade Initiated with Advanced Micro Devices (AMD)

April 13, 2021

Today, I opened a fairly short duration ITM covered call trade by buying shares of AMD and then selling Apr-23 $77.00 calls for $3.60. This trade has a roughly 76%...

Covered Calls

Covered Call Trade Action Today (AMT, GOLD, CMCSA)

April 12, 2021

American Tower Today, with no surprise to me, my American Tower shares were assigned early as the holder of the calls wanted to capture the dividend and today the shares...

Covered Calls

Covered Call Trade Initiated with Farfetch (FTCH)

April 6, 2021

Shares of internet retailer Farfetch appeared on my radar this afternoon and I opened a trade by purchasing shares at $51.95 and immediately selling ITM Apr-16 $50.00 calls for $3.30...

Covered Calls

New Covered Call with Abbvie (ABBV)

April 5, 2021

Today I purchased shares of healthcare firm Abbvie at $106.11 and immediately sold May-21 $110.00 calls for a premium of $1.68. This trade has the benefit of capturing the expected...

Covered Calls

Covered Calls Initiated in CVS (CVS) and Merck (MRK)

April 2, 2021

Yesterday, near the end of the trading session I opened covered call trades in CVS and Merck as both stocks passed one of my screens. I sold Apr-30 $74.50 CVS...

Performance Report for April 01 Expiry Option Trades

April 1, 2021

Today, I had naked Peloton puts expire as well as covered calls in Gilead, Merck and Barrick Gold. Peloton closed profitably with the share price 12% above the strike. Likewise,...

Covered Calls

Covered Call With Comcast (CMCSA)

March 30, 2021

Comcast has passed one of my covered call screeners for the past few days so I pulled the trigger this afternoon and purchased shares followed by immediately selling Apr-16 $55.00...

Covered Calls

Closed Apple and Pinterest Covered Calls

March 27, 2021

On March 25, I closed my covered call trades with Apple and Pinterest one day prior to the expiry date. In both cases, the stock prices had fallen below the...

NAKED PUT POSTS

Trades for the Week Ending May 07, 2021

May 10, 2021

May 06 - Closed Two Naked Put Option Trades Profitably. Established a Partial Covered Strangle On Thursday I bought back the SLB and NEM naked put options that I had...

Income-Generating Trades Initiated with Qualcomm and Lyft

May 5, 2021

I initiated two trades today that generated income by selling option premium: one covered call and one naked put. Qualcomm Covered Call Qualcomm has been passing one of my covered...

Option Trades with Barrick Gold (GOLD), Shell (RDS.A) and Twitter (TWTR)

May 3, 2021

I just checked my email subscription list and see that I have new subscribers from the U.K., Australia, and the U.S. Welcome aboard. To all my email subscribers, I am...

Naked Puts

Naked Put Trades Closing on April 30 (ETSY, SQ)

April 30, 2021

I had two naked put trades close this week: ETSY and SQ. Both had April 30 expiry dates and both stocks closed above the strike today but both trades were...

Naked Puts

Partial Covered Strangle Set Up with Schlumberger (SLB)

April 26, 2021

I noted in an earlier post how I established a covered call trade with Schlumberger May-21 $26.00 calls. Today, I set up what I refer to as a "partial covered...

Naked Puts

Naked Put Trade Initiated With Square (SQ)

April 21, 2021

On Tuesday, I placed an order to sell Apr-30 $225.00 Square puts for $2.10 but the share price rose immediately and my order wasn't close to being filled so I...

Naked Puts

Naked Put Trades Closing on April 16

April 18, 2021

I had three naked put trades close on April 16 and each produced a different result. ViacomCBS (VIAC) On April 07, I sold Apri-16 $40.00 puts for $0.32. Late in...

Naked Puts

Naked Put Trade Initiated with Etsy (ETSY)

April 12, 2021

Only Etsy passed my naked put screener today and I had room left in my account to initiate another naked put trade so I sold Apr-30 $195.00 puts for $3.60...

Naked Puts

Naked Put Trade Initiated with Peloton (PTON)

April 10, 2021

Peloton Yesterday I opened a 7 DTE naked put trade with Peloton by selling Apr-16 $110.00 puts. If the shares aren't assigned to me, this trade has the potential to...

Naked Puts

Closed Naked Put Trade with Square (SQ)

April 8, 2021

I bought back the naked puts I had sold earlier on Square thereby closing the trade with a 66% annualized profit.

Naked Puts

Bought Back CrowdStrike (CRWD) Naked Puts and Opened ViacomCBS (VIAC) Trade

April 7, 2021

Before I discuss today's trades, I want to welcome new subscribers to my email list. As I do not promote my site, I am intrigued by the interest from folks...

Naked Puts

Partial Covered Straddle With Newmont Mining (NEM)

April 5, 2021

As noted in an earlier post, I purchased shares of Newmont Mining and then established a covered call trade by selling May-21 $60.00 calls. Today, I sold some May-21 $60.00...

Performance Report for April 01 Expiry Option Trades

April 1, 2021

Today, I had naked Peloton puts expire as well as covered calls in Gilead, Merck and Barrick Gold. Peloton closed profitably with the share price 12% above the strike. Likewise,...

Naked Puts

Naked Put Trade with Schlumberger (SLB)

March 31, 2021

Schlumberger has been passing one of my covered call screens lately so I decided to sell Apr-16 $27.00 naked puts. As the strike price was just below the share price...

Naked Puts

Naked Put Trades With Square (SQ) and CrowdStrike (CRWD)

March 29, 2021

Price action in technology stocks and the associated options today provided me with the opportunity to sell naked puts that passed my screen. Of the handful of puts that passed...

Naked Puts

Naked Put Trades Closed on March 26 (GILD, PYPL, JD)

March 26, 2021

Today was a good day for traders with puts expiring as the market finished the week on a strong note. The positive price action resulted in two of my naked...

Naked Puts

Peloton (PTON) Naked Puts Sold

March 24, 2021

Yesterday I sold Apr-01 $100.00 puts on Peloton and today has been a reminder that not all trades go my way. As I write this post, shares of Peloton are...

Naked Puts

Gilead (GILD) Naked Put Trade

March 19, 2021

Gilead has been passing one of my covered call screens for the past week so I decided to sell short-dated naked puts on it. I sold Mar-26 $63.50 puts...

Naked Puts

Two Profitable Naked Puts Trades Closed and One New One Opened

March 15, 2021

Thanks to strong oil prices in the past month, my naked put trades in Marathon Petroleum and Exxon Mobil which were opened in February were closed profitably today. The naked...

Naked Puts

Naked Puts on Square (SQ) Closed on March 12

March 14, 2021

On March 03, I sold naked Mar-12 $220.00 puts on Square at a price of $2.51. As the price of Square closed on Friday well above the strike price of...

SYSTEMATIC TRADE POSTS

Systematic Trading

Timing Luck with Tactical Asset Allocation

April 1, 2018

Tactical asset allocation (TAA) is most often based on the investor trading once-per-month and that once occurs on the last trading day of each month. There may be an inherent problem...

Systematic Trading

Process Versus Outcomes in Investing

February 10, 2018

Outcomes. When you are a long-only investor and the markets behave like they did in 2017 it is easy to focus on outcomes and tend to allow your mind to...

Systematic Trading

Measuring Your Trading Performance With The Gain to Pain Ratio

May 21, 2017

As a DIY investor, I am a strong believer in measuring my trading/investing performance. As the saying goes, if you don't measure it you won't improve it. I just started...

Systematic Trading

The Most Important Step To Becoming a Better DIY Investor

May 16, 2017

Since my early twenties, I have been a DIY investor as I find investing to be such a thought provoking field. For the most part, I have been a rules-based...

Systematic Trading

Short Term Performance Results Will Vary

February 17, 2016

I have become less active here lately as I was invited to join a project that has nothing to with investing but is very interesting from a personal point of...

Systematic Trading

Superforecasting

November 29, 2015

If you are a regular reader of my posts then there is a good chance that you are aware of Superforecasting by Philip Tetlock and Dan Gardner. I am currently...

Systematic Trading

So You Want to Be An Actively Passive Investor

September 6, 2015

If you are of the belief that momentum persists in markets as evidenced by the abundance of supporting research and you want a once-per-month ETF trading system that isn't as...

Systematic Trading

The Challenges of Successful Trading

July 25, 2015

Successful trading isn’t easy nor is it supposed to be but the difficult part of trading may not be what most new traders originally anticipate it would be. Sticking to...

Systematic Trading

Credit Suisse Global Investment Returns Yearbook

February 10, 2015

The 2015 edition of the Credit Suisse Global Investment Returns Yearbook is now available here. Trust me, this is a publication you definitely want to download. If you have any...

Systematic Trading

Larry Swedroe Doesn’t Like Tactical Asset Allocation Funds

January 4, 2015

In a September 10, 2014 article on ETF.com, Larry Swedroe blasted tactical asset allocation funds stating that "TAA is just another game where the winners are the product purveyors, not...

Systematic Trading

Got Alpha With That ETF Momentum Trading Strategy?

December 15, 2014

The team at Gestaltu recently published two posts on their site regarding an upcoming paper titled "Tactical Alpha: A Quantitative Case for Active Asset Allocation". Such a paper would be...

Systematic Trading

Adaptive Asset Allocation and Dual Momentum Investing Using ETF’s

October 27, 2014

Although I practice systematic trading based on strategies that generate short holding periods I keep an open mind towards other styles of trading. One particular style of trading that has...

Systematic Trading

Have You Considered the Role of Luck in Your Trading?

August 4, 2014

Barry Ritholtz recently interviewed Michael Mauboussin, author of The Success Equation. Among many other topics, the two discussed the role luck plays in trading and how difficult it can be...

Systematic Trading

Best Trading Advice For Systematic Traders

August 3, 2014

If you perform a Google search on the phrase "best trading advice" you will get over 200 million results. That's a lot of advice for a trader! I thought I...

Systematic Trading

Picking Marbles Out Of A Bag

May 17, 2014

I am disappointed with my trading performance so far this year and have worked hard to determine if there is a problem with my strategies. I have made some small...

Systematic Trading

Failing Towards Success in Trading

March 16, 2014

The past four years have been incredible for US stocks with the S&P 500 up more than 60%. If we could go back in time to March, 2010 and I...

Systematic Trading

The Importance of the Starting Point in Measuring Investment Performance

March 5, 2014

Lately I have had conversations with investors who can't hold back from telling me how well their stocks have performed in recent years. I'm happy that they have done well...

Systematic Trading

The Impact of Survivorship Bias on Trading Strategy Backtest Results

February 18, 2014

If you are a trading system developer, in all likelihood you are aware that survivorship bias plays a role in the veracity of backtest results. How much of an impact...

Systematic Trading

New Bet Sizing Research From Ralph Vince

December 8, 2013

Ralph Vince, Marcos Lopez de Prado and Qiji Jim Zhu just published a new paper titled "Optimal Risk Budgeting Under a Finite Investment Horizon". Here is the abstract: Growth Optimal...

Systematic Trading

Ralph Vince and Position Sizing

November 9, 2013

I am focusing my efforts currently on improving my trading performance through better position sizing of my trades. If you have done any research into position size optimization you will...

Follow My Covered Call and Naked Put Trade Strategies

Trades for the Week Ending May 07, 2021

May 06 – Closed Two Naked Put Option Trades Profitably. Established a Partial Covered Strangle

May 07 – Sold Naked Puts on Snap

May 07 – Initiated Covered Calls with NRG Energy

Income-Generating Trades Initiated with Qualcomm and Lyft

Qualcomm Covered Call

Lyft

Option Trades with Barrick Gold (GOLD), Shell (RDS.A) and Twitter (TWTR)

Barrick Gold OTM Covered Call

Royal Dutch Shell OTM Covered Call

Twitter Naked Put

Links