The Journal View conveniently groups trades and related notes by day. Unlike stocks spreadsheet journal templates, our trading journals allows for ease in tracking setups and mistakes. Based on that belief, I entered a limit order to sell what will be a covered call after I am assigned the shares.
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This way, you will make money on the premium. A covered call will protect you against rapid increase in stock price. Again make a table similar to the one for Long Call. Max profit will be realized when the stock price becomes equal to the strike price at the date of expiration of option. A protective put involves going long on a stock, and purchasing a put option for the same stock.
A protective put is implemented when you are bullish on a stock, but want to protect yourself from losses in case the stock price decreases. A Bull Call Spread is implemented when a call is bought at a lower strike price and another call is shorted with a higher strike price.
It is implemented when you are feeling bullish about a stock. A Straddle is where you have a long position on both a call option and a put option. This is implemented when you expect the stock to change significantly in the near future, but are unsure of which direction it will swing. This can be implemented before a major news announcement which is likely to have a substantial impact on the value of a stock.
First, enter the same formulas for the Long Call and Long Put as we did in the previous sections. A collar is an options strategy which is protective in nature, which is implemented after a long position in a stock has proved to be profitable. It is implemented by purchasing a put option, writing a call option, and being long on a stock. It is meant to prevent excessive losses, but also restricts excessive gains.
The Collar is basically a combination of a covered call and a protective put. It was better for the put holder to keep their shares and take the dividend themselves. Since I owned the XLB shares, it did make sense for someone to assign the option so they could get the dividend today instead of me. Based on that belief, I entered a limit order to sell what will be a covered call after I am assigned the shares.
This morning, my order hit at the open since FEZ gapped higher. A lot was going on to cause fear in the markets in general, but it seems temporary, so I waited to react. Within a couple of days, ADI was back to where it had been the day before the sudden drop and seemed to have had a good wash out of the weaker investors.
The past couple of days saw some improvement and when I saw my ADI naked put no longer we a loser for me, I dumped it. No, the decimal is not in the wrong place. My GS position has been anything but good for me so far. Yesterday afternoon I was debating my next steps with GS and decided I could sell a new covered call without buying back my September call since it was so far out of the money.
August was good to all of us who were long stocks. GS did some heavy lifting to bring my balance higher before faltering the final few days of the month.
Even FB stopped bleeding and returned some money. That trend already reversed course on the first day of trading in September. Late last week, I entered a limit order to roll my IWM naked put that was set to expire in September.
Month End Summary — September Filed under: Account Summary , Finance , Indices - 02 Oct Finance , Stock Picks - 26 Sep