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Posted by Martin June 30, 2014
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Trade close – Franklin Resources Inc. (BEN) put selling for profit 2.15% and GameStop Corp. (GME) put selling for profit 5.69%

Trade close - Franklin Resources Inc. (BEN) put selling for profit 2.15% and GameStop Corp. (GME) put selling for profit 5.69%

As I mentioned in my post on Friday, I was expecting two more trades to close soon as they would get closer to becoming worthless. It happened today!

On Friday last week, my put selling trade against LINE lost value to $0.05 per contract, so I could buy it back (for free) and keep the entire profit. Today my last two trades with July expiration became worthless and I could buy them back (again for free) and release my margin cash for next trading.

There is no reason, or value waiting until July 18th to let those options expire (which may not happen if the stocks suddenly fall), so why leaving money on the table and risk three more weeks that I may lose them.

A few days ago I read in a book “Mastering the Trade” by John F Carter about a trader who did just that. Her option contract was already worthless and she refused to take the trade off the table. She thought that when a trade is already worth only 0.05 then there is no way the trade may turn bad. Well, it did. Not only the trader lost the entire premium she received, but the trade turned into a much larger loss.

I do not want to be such a sucker and I took those trades off the table as soon as they reached 0.05 value.

That allowed me to keep the entire profit (minus original entry commission and a buyback price). For Franklin Resources Inc. (BEN) options trade that turned to be $96.18 premium (2.15%) in two months and for GameStop Corp. (GME) the trade delivered $174.18 (5.69%) in little less than two months.

I will use the released margin for another trade, which I will report tomorrow. You can follow my twitter account for details.

Happy Trading!
 
 




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Posted by Martin June 27, 2014
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Trade close – Line Energy (LINE) put selling for profit 3.68%

Trade close - Line Energy (LINE) put selling for profit 3.68%

Today, I closed a trade against Line Energy (LINE) which I opened at the beginning of May (05/07/2014) with expiration in July – next month. I sold 1 put contract with 28 strike and July expiration for 1 dollar (or $100 collected in premiums).

Today, this trade was worthless (it actually cost 0.05) and I could buy it back for $5 and close it and keep $95 in premiums. Thanks to TD Ameritrade 5 cent feature I paid zero commission.

Great trade. I could close it three weeks before expiration, keep almost entire profit and release my margin for next trading.

I have two more trades which may lose value next week. It will be GME 34 strike July contract and BEN 50 strike July contract. Then I might be able to open another trade. But that will depend on my available cash as I am raising cash to stay small and have enough reserves for trade adjustments.

Happy Trading and investing!




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Posted by Martin June 27, 2014
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Is my struggling finally over?

Is my struggling finally over?

If you had a chance to read my “Curious history of a sucker” you know that I started investing back in 1996 and took many endeavors in losing money.

I shrank my $30,000 dollars account to $4,000 in commodities trading, I lost another circa $15,000 in stock trading. But at that time I didn’t care much. I was making a large amount of money every year and these losses were smaller compared to my income.

But one day I stopped that madness and decided to start over.

In 2006 I returned to investing and trading. But I wasn’t successful at all. For next five years I was again losing money. This time I was determined to survive it and try again and again.

I was reading all books about trading and investing I could find. I was learning about great traders like Nicolas Darvas, Jesse Livermore, William O’Neil, Warren Buffett, Benjamin Graham, and many others.

I learned a lot, but I still wasn’t successful and I still was losing money. Five years I was struggling.

Then a light at the end of the tunnel showed up. Three years ago I started investing into dividend growth stocks and trading options. I started small and slowly. I tried not to over extend my options trading but I tried to extend my dividend stock investing as much as possible.

And it looks like I finally broke through the struggle and started making money. I finally started seeing my accounts growing year after year. I started seeing my losses shrinking. And I can see my losses from 2006 all the way up to today disappearing.

I wish this wasn’t a dream or just a temporary good luck. I wish, this was a pattern towards successful investing and trading, and that I will be able to generate ever growing income consistently and forever.

I like posting my results and trades for you, my readers, to see. I want everybody to see, that it is possible to start small (with just $2000 account) and grow it big.

My portfolio

I decided to convert my investing into a real business. I will be starting a management company and going for all required licensing to be a certified advisor and money manager. I will be transferring all my available money and trading accounts to my business account and continue running my investments as a business.

I wish you a success in your investing/trading effort. If you are just starting or already investing and successful I am happy for you and encourage you to endure to the end. I testify that the end will be fruitful and it will make you rich (and not only monetary).
 
 




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Posted by Martin June 24, 2014
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New Trade – BUY NOV14 CALLS on GLW

New Trade - BUY NOV14 CALLS on GLW

Corning Inc. (GLW) received an upgrade today and rallied in the morning. That put this stock out from a quite long squeeze into a rally. It was a first day when my indicator showed and entry point. So I decided to scale in another call trade out of my 3 planned trades.

I planned to take three trades to try my new long call strategy. I am risking $240 and my potential profit is unlimited.

You can review my previous trades here.

These trades are about my new indicators I put into my trading tools recently. I tested them in paper account for a few months and they seem to work well and generate nice signals. This can help me to use long call or put strategies and increase my gains. I can also abandon this strategy later if it won’t satisfy my expectations.

So this trade, with the previous two trades are my test trades.

When buying options, you typically want as long option as possible to avoid time decay. If you buy 150 or more days to expiration option (be it a call or put), the time decay is very slow and stock movement can change the price of the option. If you buy 56 or less days to expiration option, the time decay will eat you alive. For short time options, you want to be a seller, and you want to be buying long time options.

That’s why I bought November contract, hoping this stock will shoot up and I will close with profit. Although the end of today’s trading with GLW was horrible and the stock returned all morning gains.

Trade Detail

BTO 1 GLW NOV14 22 CALL @ $1.30

 

Max Profit unlimited There is no max profit on calls. In theory, the stock could keep going up forever. But remember, your profit is limited to the move the stock can make before the call option expires. Profit occurs anywhere above 23.30. With 1 contract, you will profit $100 per point GLW is over 23.30.
Max Loss $130 A call option gives you the right to buy the stock at the strike price. If the stock is below the strike price on expiration day, it will be worthless. So, max loss occurs if GLW is $22 or less on expiration day, which is November 21 for this option.

 
 

 
 

What do you think, will GLW spike up or there is no potential at all?

Happy Trading
 




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Posted by Martin June 23, 2014
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13 years old Alex knows about options trading more than me – watch this:


 

 




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Posted by Martin June 23, 2014
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Robyn the Trader – Rising Stars


 

 




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Posted by Martin June 22, 2014
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Karen the Supertrader Returns to tastytrade to Share More of Her Successful Trade Secrets!


 

 

Karen the Supertrader manages $190 million dollars today. She started with $100,000 four years ago.

Her attitude? Never lose money! Once you get a premium, defend it. Never give it back.




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Posted by Martin June 19, 2014
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A weird day of trading

A weird day of trading

My portfolio is normally correlated with the market. When the market goes down, my stocks go down too. When the market goes up, my stocks go up too.

Today I experienced a total opposite behavior. The market went down (except the beginning and end of trading, but all my stocks went up:

Market vs Portfolio

Is this a sign of a divergence and market potential reverse? Or am I just too superstitious?

The end of trading was even better thanks to Targa Resources (NGLS) which was in talk about possible takeover by Energy Transfer Partners (ETP). That pushed the stock up by 17.7%

Targa Resources

This makes this stock my first price double! Should I sell part of my position or let it run? Will the deal be a positive thing for shareholders or should we run away?

Targa Resources paid nice dividend in 7% yield range with a great 9% dividend growth. Now the yield is at 4% level (which is still great). The question is, should I sell everything, a part of my holdings or hold?

I will hold as I only have a small number of shares in my possession and I believe, selling part of my mini-stake wouldn’t be worth it.

What do you think?
 




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Posted by Martin June 19, 2014
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Gold Gone? Germany baffled as Fed bars access to bullion


Everything is okay, no worries, gold is a dead asset. It produces nothing, it creates nothing, it pays no dividends, it is not needed, and it will go down even more.
 

 
So why the heck are Germans so baffled?




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Posted by Martin June 18, 2014
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Remember


 




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