Kev's Gettin' Nekked, Join In!

[Keventerprises]

Alright, let's see what we can do with this. Let's discuss Naked Options. After this introduction I will try to keep it short and current as to thinking and trades. Please add your thoughts, knowledge, experience, and wisdom. To those who already know this, my admiration, to those who do not, my information.

Observations:
#1. It is better to be a seller in advance, than a buyer later.

#2. Something you rarely hear on the news (lately) is that, "There was a steep Incline in the Stock Market today!"

So the importance of Defensive Strategies, is very important. Sometimes it's best to get Bear Nekked.

As others have shared with me the importance of the VIX Volatility indicator, so shall I with you. Sell Naked 19 Puts on the VIX any chance you get,then you own them at 17.80 and if you get those assigned to you you're lucky, and that would only happen because the rest of the market went way up too. Aiki paved the way for this insight.

Recent Options Thinking:
When I knew SWC was going to go down (Public Information in Montana), I applied for Naked Options. Then I wasn't trapped into the shares as they went down, after I had already sold Oct 17.50 CC's for 3.50 (on a $16 channeling stock). The PPS was 15.98 on May 22, and I sold SWCJC 17.50 Calls for 3.50. That's 21.902377%.

Right now I find it easier to see things that AREN'T going to happen.

Good Moves:
Covered Calls:
SWCJC Oct 17.50 $3.50 (PPS 15.98)
PALIU Sep 7.50 $1.00
TRAFI Jun 45 $2.20

Stocks that went ITM:
BNIFA Jun 105. Sold CC's for 5.20. Went straight past Go and keeps going. Worth owning.
JRCC Jun 45 2.50 (PPS 39.00 on 6/2)
ANRFQ Jun 85, Sold for 4.80/85.42 and 7.10/88.78

Naked Options:
Calls:
ANR Jun 85 ANRFQ 7.10/PPS 89.249 (Should have bought more shares to cover on this Runner when it passed the Strike Price. Duh.
VIXFX Jun 22.50 (Peaked at 24.12, Pucker Up). Didn't get exercised because of the uncertainty of going down, and Premium paid by them adding to their cost. Lucked out on that one. Sold Jun 22.50 Calls for 2.20 so I was O.K. until 24.70. Should have read Aikis post earlier.

Puts:
DRYS Jun 85 Puts DQRRQ 3.30

Edge of the seat Naked Options:
Sold VIXFX Jun 22.50 Calls for 2.10, Aiki warned us about being careful here, but I had already done it when I thought the market bottomed on Friday, and then VIX went past the 23.50 as he said could happen. 25 is fairly extreme, and I was nervous but didn't get exercised at a VIX high of 24.21, so they didn't want to take the possession, or risk of it dropping plus their Premium.

Liked Today:
VIX Jun 19 Puts for $.25, and if it gets exercised you own VIX at <18.75 and your other stocks are up too. We need a good drop in the VIX! lol

It is my sole intention to bring together all of our thoughts and minds, and exchange knowledge on this. Hopefully I can be a Catalyst, and Scout.

:captain:

[netwrangler]

Great start on a thread, Kev. I'm looking forward to following the 'action', and even contributing when it slows down to my speed.

One question so far, are you long or short the DRYS puts?

I figure you are short, because we are talking about getting nekked here.
If so, there's one to watch today.

Anyway, great thread!
:top:

[Keventerprises]

Great start on a thread, Kev. I'm looking forward to following the 'action', and even contributing when it slows down to my speed.

One question so far, are you long or short the DRYS puts?

I figure you are short, because we are talking about getting nekked here.
If so, there's one to watch today.

Anyway, great thread!
:top:

Yes, I sold Jun 85 Puts on DRYS, which brings up the very important subject we need to talk about with Options. When selling Calls near the top or Puts near the bottom, what do we do when the stock exceeds our expectations and goes In The Money? This depends upon how strongly we feel about the stock and our original decision. In the case of Naked Puts such as DRYS, I wouldn't mind too much having DRYS put to me because my Cost is the Strike Price of $85 minus the Premium received of 3.30= 81.70, which probably won't be exercised voluntarily unless it hits a PPS of close to $80.00, or at expiration automatically. So, if this was a Call I had sold and it went into the money, if I felt it was going to keep going, I would buy shares to cover near the Strike Price. Since it's a Put, I could:

1) Sell more Naked Puts.
A) ITM Puts: The 85 Puts I sold for 3.30 are now worth 4.70. This approach would require more money and confidence than I have. There is still some excess value in the Premium because the PPS is only ITM by 1.38 but the Premium is 4.70! I could keep doubling down and then write you letters from the homeless shelter.

B) OTM Puts: DRYS Jun 80 Puts pay 2.50. The idea is that the Stock should not hit it's Strike Price, or at least not stay there, and expires in 10 days. I didn't feel the stock would go this low, so where do we draw the line? (Open Interest) 7,409 people paid 2.50 for Jun 80 Puts, so they believe DRYS will go below 77.50. I do not.

For the record, for defensive safety my favorite thing about selling options is usually selling Calls, except for the beauty of selling Puts on the VIX. With bad news being more common than good, if the market goes down, VIX goes up and your Put expires. $1.20 on a $19 commodity is 6.3157893%, and for the VIX to have gotten that low, the rest of the market just had a good rally.

What do we do at the opposite end of the spectrum when the market is already bad? I sold VIX 22.50 Calls for 2.20, but this doesn't have the safety of selling VIX Puts, because the VIX can go up more, but it would be unlikely to suddenly drop below 17. We could buy VIXRT Jun 19 Puts for $.25. It could easily go to .75+, but I'd prefer to be a seller in this market! Sell OTM VIX Calls at a higher Strike Price? Not for me.

So, What are our Options? When something is down is not the time to sell Calls, such as on DRYS. Yet going farther out to Dec 20 I can sell 80 Calls for 18.40. I have an extra 100 shares uncovered, but it will go up even more when the stock goes up. Even if I did not have them covered, didn't I just in effect sell my shares for $100? I hope they take them right away at that price. Isn't that a built-in sale? Why would someone pay 20% up front now instead of just buying the shares for $83? Afraid of a drop to $65? They need a tax deduction?

In the same way on VIX, now is not the time to sell Puts, they will bring more as VIX goes down. I will accumulate VIX anywhere near 18-19 to sell CC's on later. As Aiki said, "I would sell VIX 15 Puts all day long, but they're not moving." If the VIX hits 15 we'll all be rich! I found them Aiki: November 15 VIX Puts with Bids of $.10 VIXWC. To bring in $10,000.00 you must sell 1000 contracts, but Pigs will be flying by if the VIX hits 15, and we'll all be rich, and at worst you own VIX at 14.90! Interesting that 15's are only selling during the election month!!! Keep that in mind, there should be a good rally in November, and when the VIX goes down here soon, those VIXWC's may be selling for $.20+.

[netwrangler]

Yes, I sold Jun 85 Puts on DRYS, which brings up the very important subject we need to talk about with Options. When selling Calls near the top or Puts near the bottom, what do we do when the stock exceeds our expectations and goes In The Money?
I knew this would be a good thread!

The question you raise goes beyond positions in calls or puts.
The general question is:
What do I do if the trade I was planning on isn't working?
I'll come back to your specific alternatives in a later post.
Before doing that I wanted to highlight two points:

All well-conceived trades make money if the market performs as expected.
The true measure of a trader is how the trader performs when the market does not perform as expected.

Let's see how that happens.

[Keventerprises]

I knew this would be a good thread!

The question you raise goes beyond positions in calls or puts.
The general question is:
What do I do if the trade I was planning on isn't working?
I'll come back to your specific alternatives in a later post.
Before doing that I wanted to highlight two points:

All well-conceived trades make money if the market performs as expected.
The true measure of a trader is how the trader performs when the market does not perform as expected.

Let's see how that happens.

Gold Puts are climbing much faster than Calls are dropping, by 2.4 to 1. GLD 87 Puts went up 130% today, and Calls only fell 56%. Went well below support, not finished dropping yet. Granted, they went into the money, but more decline is still yet to come for Metals. I should have sold Calls last Friday or Monday on GLD for 2.70.

[Keventerprises]

Gold Puts are climbing much faster than Calls are dropping, by 2.4 to 1. GLD 87 Puts went up 130% today, and Calls only fell 56%. Went well below support, not finished dropping yet. Granted, they went into the money, but more decline is still yet to come for Metals. I should have sold Calls last Friday or Monday on GLD for 2.70.

O.K., the decline of Metals accelerated faster than expected and has reached 'A' buy point, and will dip again on Friday. I'm in on Silver at 16.62, missed it at 16.50. I bought 1000 oz., which is 1/2 what I wanted, to average in, because there should be another dip on Friday the 13th! Get this, Gann had some Astrological influences and Friday the 13th is ALSO the exact 2 year anniversary of Gold's extreme Low in 2006! 16.50 or better is good for Silver.

Steward, Fetch my Gold Shorts...

[Keventerprises]

Abandon Ship! It's true. This is the 2 year anniversary of when in 2006 Gold bottomed after going down 30% in 3 weeks to a low of 56! I'm not worried about Gold so much as what it will do to the market on Friday the 13th!

3366

[Keventerprises]

Abandon Ship! It's true. This is the 2 year anniversary of when in 2006 Gold bottomed after going down 30% in 3 weeks to a low of 56! I'm not worried about Gold so much as what it will do to the market on Friday the 13th!

3366

That's a low of $560 per ounce of Gold because GLD is 1/10 of one ounce.

[Keventerprises]

Now I remember that bad time that Gann refers to this being the 2 year anniversary of personally, not just statistically. Not because I was trading, because I was superstitious. It was 6/6/06! :evil2: I knew last Friday was going to be bad too, but not that bad. It was 6/6 and the Dow dropped 400 points! :twisted: This coming Friday is Friday the 13th. 8O

I don't normally dwell on this, but be careful. :captain:

[Keventerprises]

The Iron Condor seems to be a rare species, though not too raskelly. What we need is ultimate safety, and I'm willing to sacrifice some gain in exchange for safety. Here is my understanding of the Iron Condor so far:

In this case I will use the extreme example of DRYS, which went well below anyone's expected low of 90. The Iron Condor is designed to protect us up or down. After the stock dropping, and then selling DRYS 80 Puts for 3.30 and it going down past that strike price, I would like to have had something going up! Enter the Iron Condor. If I had also Bought a cheap Put 1 Strike below my 80 at 75, it would have gone up to offset the decline of the 80 Put. Then I don't have to worry about buying back my 80 Put at a higher price. At the time of original purchase, or a little later if your bullish, I should have Sold a Call at the level of estimated Resistance and Bought a Call 1 Strike above that, let's say 100 and 105 or higher, depending on your risk tolerance. What would have happened with an Iron Condor when DRYS did not go our way by much more than expected?

Starting with an original PPS of 94.34 on 5/22, I sold Covered Jun 100 Calls for 5.50. Later, after DRYS had dropped to 86.82, I sold 80 Puts at 3.30.

What would have happened if I had done an Iron Condor? (adjustments will be discussed later).

Starting on 5/22, 1 month before Jun 21st expiration date.

PPS 5/22 94.34
Buy cheap Put 1 Strike Below Expected Low: Jun $85 Put (Cost) -$.40
Sell Put at expected Support of 90: +$2.00 (Approximately, I was not tracking Puts then).
Buy 110 Call at 1 Strike above expected high of 105: -$.40
Sell Jun 100 Calls (Expected Conservative High/Resistance): +$5.50


Analysis:
Iron Condor Starting 5/22:
-94.34 PPS
-16.89 Drop in PPS to 77.45 Close on 6/11
-.40 Buy Jun 85 Put
+2.00 Sell Jun 90 Put
-.40 Buy Jun 105 Call
+5.50 Sell Jun 100 Call
=$84.15 Net (Gross) Share Cost as of 6/11 without Income from Options.
=Loss of 10.19, once again this is without changes in Values from the Options.

The 85 Put is now worth $9.00!=+$9.00
The 90 Put should have been bought back for $.90 on 6/9=-$.90
The 105 Call bought is now worth $.05 and could be sold, but wouldn't pay for it's own commission (this was our insurance and served it's purpose. If the trade had went well and gone the other way, it would be the one that's worth $10.00+).=-$.35
The Jun 100 Call sold is now worth $.10, so we keep the 5.50 Premium at no cost, unless the PPS goes up $22.55 to 100+ in 10 days. (Already accounted for above=0 here).


Outcome:
Net Loss using an Iron Condor on a very unexpected Drop of $16.89=$2.44, with only one adjustment of Buying Back the 90 Put on 6/9 for .90!

Standard Covered Call Position 5/22, adjusted once by selling 80 Put for 3.30:
(94.34 PPS 5/22)
-16.89 Drop in PPS as of 6/11
+5.50 Covered Call sold on 5/22
+3.30 Put sold
=Loss of $8.09

Whew, that was interesting! You still with me? I'm going to have to get a Pocket Protector next...

First time exploration. Please correct me if I'm wrong. I used a fairly extreme and familiar example to see if this is a valid technique or not. If this were set up in advance one time, I could have gone to the lake for a week knowing that I was covered 4 ways. I'm glad this came up. This may be what I've been looking for. Does anyone have experience with the Iron Condor? Please enlighten me. Keep in mind this is a trade gone wrong, the upside will be the topic next. Some gain is sacrificed for this protection, but that's fine with me.

[Keventerprises]

I'm very impressed by what I was told would happen in advance by a Gann aficionado during this month of June 2008. I was told that there would be a two year anniversary of the movement of Gold. Please see the attached chart on Gold, and notice the striking similarity to June 2006.

3389

[Jelly]

I'm very impressed by what I was told would happen in advance by a Gann aficionado during this month of June 2008. I was told that there would be a two year anniversary of the movement of Gold. Please see the attached chart on Gold, and notice the striking similarity to June 2006.

3389

Jew c dis?


http://seekingalpha.com/article/81291-recent-world-events-are-bullish-for-metals

[Keventerprises]

Jew c dis?


http://seekingalpha.com/article/81291-recent-world-events-are-bullish-for-metals

I hope that gold goes up like the summer of 2006. Maybe we can 'Prophet' from this... lol. I bought 2,000 oz of Silver and 40 oz of Gold. The easier way to trade these is GLD (optionable) or SLV, but I want to pay this guy his commission of $100.00. I'll keep you posted.

I have seen that Seeking Alpha site. Interesting to take in. It's a little commercial image-wise, but I haven't followed their predictions closely to know much about them. Maybe if metals go up, then that guy can buy a new damn cowboy hat... :D

p.s. Did that .pdf GLD graph open O.K.?

[Jelly]

I hope that gold goes up like the summer of 2006. Maybe we can 'Prophet' (Haha, you made a funny!) from this... lol. I bought 2,000 oz of Silver and 40 oz of Gold. The easier way to trade these is GLD (optionable) or SLV, but I want to pay this guy his commission of $100.00. I'll keep you posted. Who are you paying? Are you buying the real thing?

I have seen that Seeking Alpha site. Interesting to take in. It's a little commercial image-wise, but I haven't followed their predictions closely to know much about them. Maybe if metals go up, then that guy can buy a new damn cowboy hat... :D Be rich, look poor, I always say.

p.s. Did that .pdf GLD graph open O.K.?YES!

[Keventerprises]

YES!

To be sure that I give you exact information, I will confirm the total expenses and summarize them for you as a percentage in a later post.

It's a 4:1 Margin, so for each 1000oz Bar of Silver that I "Hold', I only paid for 250 ounces, and it is 1% to buy IN and 1% to sell out, including the Spread between Bid and Ask, which is about .75%, plus the commission of .25%. Silver has often moved as much as 10% per month.

I will summarize the exact figures as a percentage of the Margined Movement for you soon, including movement required for Break-even.

I don't know how to get around paying the difference between Bid and Ask, other than mining it my self or robbing a Mint, but SLV is 1/2 as much expense as Monex. Anyone know how to buy Silver Wholesale? Buying beer wholesale was alot less expensive direct from the manufacturer versus retail with 2 additional markups in there.

Netwrangler, did you know Reps for Silver...? :wink: :D I wonder if my Son-In-Law can buy Silver direct from Stillwater? (I'm glad that I sold my SWC he told me would go down. This is public Information/common knowledge in Montana). I really don't mind paying .25% for the commission to the Sales Rep who I like alot, but the Spread must be considered. At .75% Spread, Monex is $.12-.14 per ounce difference between the Bid and Ask, and SLV is only $.06 per ounce difference between the two.

I will summarize this as soon as I can.

[Keventerprises]

Update:

The last week before Expiration is Clean-Up week.

ANR: Went way past go, ITM deep. Should have sold higher Calls. Will Rollup Calls to July 100-105 by buying back the calls on a dip, and selling Jul 100-105 Calls. It's a keeper. It didn't go anywhere but UP steadily during this last month. I feel it is a keeper. Old King Coal is what we have more of than anyone else in the world. That and beautiful women.

Covered Calls that are working (in some cases, a little too well):
TRA, JRCC, UPL: Climbing right along through it all, they have steadily gone up. Fortunately we have more Coal than the rest of the World, and hopefully more Innovation.

Still Solid Stocks:
BNI, stays in there, Net stopped me from buying back my 105 Calls and then it went down near it's SP, which is what Covered Calls are intended for, insurance.
VIX: Should expire below the 22.50 Calls I sold. Of Note: They are 'European Style' Options, which means that they are a cash settlement only, and also they expire on the Wednesday before all other Options!

Things that weren't working and need attention:
Need to take action on ANR to Rollup the Calls to Jul 100-105. It's deep ITM.
DRYS: Coming back to neutral. I'm finally good on the 85 Puts I sold!

Metals:
The 'Gann Man' got me into Silver at 16.47 & 16.62 for (2) 1000oz Bars and we triggered out at 17.24 (on one bar) in only a few days, we held the other bar which should go to 17.40 fairly soon. Platinum broke resistance and should run up $100/oz+ to 2100-2200 shortly. I'm in at 2063 for a 10oz bar that looks like a damn little credit card. I should have bought Rodium last year... lol It was only $3,500/oz then, and now it is $10,000/oz! lol

Lessons learned this first month of Options Trading:
#1: Always Listen to and learn from Netwrangler.
#2: "Don't do a whole lot with Options during the first week after Expiration." -Netwrangler wisdom.
#3: If DD turns into 'Deep Do-Do', please refer back to lesson #1.
#4: I owe Netwrangler about 4-5 cases of Pacifico.

:top:

[netwrangler]

Lessons learned this first month of Options Trading:
#1: Always Listen to and learn from Netwrangler.
#2: "Don't do a whole lot with Options during the first week after Expiration." -Netwrangler wisdom.
#3: If DD turns into 'Deep Do-Do', please refer back to lesson #1.
#4: I owe Netwrangler about 4-5 cases of Pacifico.
Well, let's take these points in order:

If I were really that good, my wife and I would be on a very tastefully appointed sailing yacht in the Aegean Sea right now.
Hey that works for me. I just need to add another 'zero' to my net worth.
Actually, the lesson here is that the first week after expiry can be volatile. What you do in the week prior to expiry is based, in part, on what you expect to happen in the week after expiry.
For example, if the market looks like it is going down, well let that ITM covered call be assigned, and buy back in the following week at a lower price.
I love the 'conceit' of DD turning to Do-Do. That's a great image.
But if my DD looks better to you than yours, I'll bet that's because I started my DD earlier. DD is something you do before you buy — sometimes weeks before.
And on your last point, I accept with pleasure. Pacifico is great beer. Oh, and 2-cases is plenty. :wink:

Kev, you are a great energy source for the team.

[Keventerprises]

Well, let's take these points in order:

If I were really that good, my wife and I would be on a very tastefully appointed sailing yacht in the Aegean Sea right now.
Hey that works for me. I just need to add another 'zero' to my net worth.
Actually, the lesson here is that the first week after expiry can be volatile. What you do in the week prior to expiry is based, in part, on what you expect to happen in the week after expiry.
For example, if the market looks like it is going down, well let that ITM covered call be assigned, and buy back in the following week at a lower price.
I love the 'conceit' of DD turning to Do-Do. That's a great image.
But if my DD looks better to you than yours, I'll bet that's because I started my DD earlier. DD is something you do before you buy — sometimes weeks before.
And on your last point, I accept with pleasure. Pacifico is great beer. Oh, and 2-cases is plenty. :wink:

Kev, you are a great energy source for the team.

You are a great energy too, Net! From your complimentary mixture and balance of right and left brained talents, you are balancing both hemispheres very well.

Just for fun and out of curiosity, may I ask or guess that you are a Sagittarius? November 23rd-27th? I really don't dwell on that, and just having fun. In a room of 30 people, 2 will usually have the same birthdays. I'm a Libra, and TRY to consider both sides, before acting. Just in fun... :birthday:

[Jelly]

To

I will summarize this as soon as I can.

Thanks Kev. This is another slightly complicated concept for trading. Not to mention how complex the metal (mental too) learning curve is.

I'm doing pretty well on the options doh. So well, that I'm totally afraid to pull any triggers. That's a good thing, eh?

[netwrangler]

You are a great energy too, Net! From your complimentary mixture and balance of right and left brained talents, you are balancing both hemispheres very well.

Just for fun and out of curiosity, may I ask or guess that you are a Sagittarius? November 23rd-27th? I really don't dwell on that, and just having fun. In a room of 30 people, 2 will usually have the same birthdays. I'm a Libra, and TRY to consider both sides, before acting. Just in fun... :birthday:
Let's just say I'm mildly bullish - near the cusp, so to speak.

And that note about 30 people in a room is a great bar bet. As I recall, the break-even is somewhere around 23. By the time you get to 30 people, the odds are really in favor of having two people with the same birthday.

That's another great project for the spreadsheet jockeys amongst us. The question is, "How many people have to be in the room for the odds to be better than 3-1 in favor of two having the same birthdays?"

Show your work. ;)

[Keventerprises]

Let's just say I'm mildly bullish - near the cusp, so to speak.

And that note about 30 people in a room is a great bar bet. As I recall, the break-even is somewhere around 23. By the time you get to 30 people, the odds are really in favor of having two people with the same birthday.

That's another great project for the spreadsheet jockeys amongst us. The question is, "How many people have to be in the room for the odds to be better than 3-1 in favor of two having the same birthdays?"

Show your work. ;)

I was going to purposely misspell the word SagiTaurus...that was my next guess.

With 365 potential Birthdays in a year, it would seem to require 366 people in the same room in order to have 1:1 odds for two people having the same birthday. If Breakeven is actually at 23 people, then we must need to take into account 'Seasonally Adjusted Sex.' Most couples start off having frequent sex, thereby increasing the odds of greater diversity and averages of daily births dramatically, but this must be weighted by June weddings, Christmas, Thanksgiving, other Holidays, cold weather months, and Sympathy Sex. The original highly positive number is unfortunately also offset by 'Social Security Sex', which is not enough to live on. lol So from this we must Postulate that bursts, or surges of births, occur. Oh, and don't forget weekends narrowing the range to a more concentrated level, causing a 5:2 reduction by itself, excluding begging and sympathy sex during the week, which is offset by those who got none on the weekend. Further we must consider Singles Activities, which are largely focused on weekends also causing a further concentration and lessening the randomness of Birthdays.

So what is the Etiology of the 12.2 difference between the expected 366 people and the conservative 30 people sharing a Birthday? lol 366 x .4 (2/5 weekend:weekday ratio)=146.4 divided by 4.5 major holidays per year = 32.533 divided buy an average of 4 months of cold weather, half of which was already credited for Christmas and Thanksgiving = 32.533 divided by 2 = 16.2665, plus the randomness of people 'Getting Lucky' at .333 times per week =23, so Therefore to make these odds be 3:1 would require 69 people in the room! lol

I'm sure you are keeping up more than your share of the odds. :santaclaus:


Just to clarify my Options:
Only 2 of my Options are Naked, because I went into this conservatively. VIX barely missed being exercised on my 22.50 Call I sold, and made 2.20 on, but unfortunately DRYS is the other one, which I sold 2 contracts of 85 Puts on for 3.30, so I'm neutral at 81.70. I'm hoping for a rise in the PPS to come back to >85, or I will roll them Down and out to July. JRCC CC has increased by 50% since June 2nd! The 40 calls I sold are now worth $18.00, but I made a few bucks and learned. I may let the shares go or roll them up to Jul 60 or higher and sell them again for $6.00. I'm guessing ther will be a 'settling' period next week, and I'm going to streamline to keepers and metals next month.

Gann Man continues to amaze me. He told me to hang on to the second bar of Silver and it would go down a little yesterday morning on Tuesday 6/17, and not to worry it would go right back up to 17.40 today. We called each other and got out at 17.38 and it dropped .10 while we were still on the phone. Still back up to hovering at 17.36. Yesterday, he told me to buy Platinum at 2062 for a run to 2100-2200, and it hit the 2096 this morning. Our first bar of Silver triggered out at 17.24 surprisingly soon and perfectly timed. Very good sense and feel for this together.

JRCC never stopped and I will lose the 18 gain if I don't roll up to Jul 60 for %6.

Aloha to Aiki...

[Keventerprises]

Well this was the end of my first month of trading Options, starting with Covered Calls and transitioning into a few Naked Options. Holding the actual stocks for covered calls cost me alot of my gains because of a few of their PPS declines, mostly on DRYS and a few Solars such as SOLF dropping after a good earnings report, and JASO and SOL dissappointingly going down. LDK and SOL only went down a little and I consider them to be my favorites as far as holding steady, although they followed oil somewhat up and down. If I had just sold the call, I would not have suffered from the stock's decline, however, in a few other cases such as JRCC that went through the roof with a 54% gain since June 2nd that would have cost me dearly on a non-covered call, and although I made a few bucks I lost that gain because of selling the call instead of buying it. In that case the stock went up so much I couldn't bring myself to buy back the call and just accepted a small gain from the CC.

Since I still have the other CC shares and know the stocks better I will try to recoup my loss on the solars by selling Jul Calls at their highest PPS Strike Price of this last month. Tracking and charting really helped me get to know these stocks' typical behavior and range through a rough month. On a two others that did well and I felt were keepers, I did a Rollup to Jul at a higher strike price that recouped mcuh of the outlay for buying back the calls that were in the money, but high enough premium to sell July calls on.

In transitioning more to Naked Options, I recommend caution and knowledge of the stock and it's usual trading range. One thing I really like about Naked Options Approval is you are not trapped into the stock on a covered call. If you know the stock is going down, you can hold the option, especially if it was sold at the top of the range of both, and sell the stock. Then you're Naked, but I knew SWC would drop and I had sold 15 Calls on it for $3.50, and now that the stock has gone down I can buy the calls back for around $.75, and even sell them again later up and down. Each time this lowers your cost on the shares, and even if I lose them someday, my cost will be low, if successfully done. I will post more on this as we go along.

I also feel comfortable selling Naked Puts on the VIX at 19 when the market is up and the VIX is around 20. That's the only thing I feel comfortable selling Naked Puts on because if the market tanks, they will expire because the VIX will be high. Buying cheap puts on the VIX when the market is down is even safer because your risk is limited to the price of the premium, and will go up when the market goes up. I bought Puts on the VIX Jul 19 and 20 for .25 and .50 that cost about the same as selling Jul 22.50 Jul calls on the VIX. After I sell 2 more contracts of Jul 22.50 calls I will be even and trade them as we go. More later on this as we go.