Position update July 31, 2013

aplus's picture

July has been a great month, and hopefully you made some money with us on the trades that we executed.  If you didn't, we will have some new trades next week so watch closely or sign up for the newsletter to get alerts when we post a trade.  

We are still in a very low volatility market, and it has been difficult to find good yield on option strategies since the premiums aren't paying very much.  However, we are very happy with the performance of our recent trades and we've captured respectable gains through both long and short, and stock and option positions.  We have focused on various sectors such as airlines, healthcare, technology, banking -- and so far all of our positions have had positive returns.  

* (returns and prices in the chart above are as of 8/1/13)

We are still riding the bullish exposure to US Airways, and believe that there is additional return ahead.  The return on both the short put and long call is 22%, and 60% respectively, and this trade cost us only $5 to get into.  This is a textbook trade that we love to put on, and we still have almost 18 months to expiration.  There is $1.50 in premium on the call options right now, and we will be watching the stock closely.  There will be some choppiness as it trades within its range, but with the time that we still have left, we are in a great position on this play.

Edwards continues to prove our thesis, the stock has been somewhat range bound, but it broke out above $71 today and we are almost 15% ahead on the long stock position.  This is still a keeper.

There were opportunities in 3D Systems, Apple, eBay and Bank of America to sell puts and collect some premium, and we have seen those positions play out as planned.  The puts are decaying, and we're in the green on each of those positions.  Expect more of these plays to come as we find positions that pay decent premiums while letting us go out of the money enough to not "get put" the stock.  

We recently sold Dec $60 Puts on Tesla (TSLA), and got paid $1.12 per contract.  That is a great premium in our view considering that the stock is trading north of $130 right now.  While we like the stock, leadership and the company -- it's just too rich to go long the stock, on various levels.  

Lastly, we shorted Angie's List on July 18th at $26.60, and 1 week later covered for a 10.7% gain.  

Look for additional trades in August, and hopefully we can continue reaping profits together!

 

 

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