This week, same as last week. Last week I said this:
My strategy this year has been relatively simple. I own TLT – iShares 20+ Year Treasury Bond ETF. It’s a long bond fund, so as interest rates decline, it goes up. It also pays interest.
Every week I do covered writes against my shares. I sell call options against the shares I own. I generally sell options that expire at the end of the week, and I sell them at slightly out of the money.
Once again, it would appear that I have outsmarted myself. I should have simply held the stock, and not tried to increase the return by doing covered writes. Here’s an updated version of the transaction history I showed last week:
- December 31, 2015 dividend + $254.03
- Covered write, January 4, $122 strike, expiring Jan 8 +$992.46
- Buy back Jan 8 calls – $767.50
- Covered write, January 12, $123.50 strike, expiring Jan 15 +$582.49
- Buy back Jan 15 calls -$2,117.50
- Covered write, January 19, $126 strike, expiring Jan 22 +$477.50
- Buy back Jan 19 calls -$2,072.49
- Covered write, January 20, $128 strike, expiring Jan 22 +$797.49
- Jan 20 calls expire worthless
- Covered write, January 26, $126.50 strike, expiring Jan 22 +$632.49
- Buy back Jan 26 calls -$937.50
- Covered write, January 29, $128 strike, expiring February 5 + $502.50
- Buy back Feb 5 calls, -$705
- Covered write, February 5, $129 strike, expiring February 12 +$910
The net result of all of these transactions, if you add up the pluses and minuses? A loss of $2,866.03
Yikes. The only saving grace? I still own the stock, which on December 30 was worth $120.04 per share, and on February 5 was worth $128.66. So, the profit on 1,000 shares is $8,620, which ain’t bad. Of course it’s $2,866 less than it would have been if I had just held the stock, but there you go.
Some Thoughts on Gold
What about gold?
A quick review of the long term chart would appear to indicate that the recent upsurge is probably about done. Like dinner. Why?
- Long term down trend lines remain in place.
- The RSI is now at levels that, for the last three years, have marked intermediate tops.
- The world has not ended, yet, so there is no reason for gold to keep rolling higher.
I have lightened up on some of my gold holdings, and done covered writes on the rest. Sadly I think, for now, we are about done.
Next week we can explore whether or not the general stock market is about to charge to a blow off top, or collapse from here. At the moment it’s not looking good.
Thanks for reading. More next week.
Still no clue what I’m doing
by JDH on February 6, 2016
This week, same as last week. Last week I said this:
My strategy this year has been relatively simple. I own TLT – iShares 20+ Year Treasury Bond ETF. It’s a long bond fund, so as interest rates decline, it goes up. It also pays interest.
Every week I do covered writes against my shares. I sell call options against the shares I own. I generally sell options that expire at the end of the week, and I sell them at slightly out of the money.
Once again, it would appear that I have outsmarted myself. I should have simply held the stock, and not tried to increase the return by doing covered writes. Here’s an updated version of the transaction history I showed last week:
The net result of all of these transactions, if you add up the pluses and minuses? A loss of $2,866.03
Yikes. The only saving grace? I still own the stock, which on December 30 was worth $120.04 per share, and on February 5 was worth $128.66. So, the profit on 1,000 shares is $8,620, which ain’t bad. Of course it’s $2,866 less than it would have been if I had just held the stock, but there you go.
Some Thoughts on Gold
What about gold?
A quick review of the long term chart would appear to indicate that the recent upsurge is probably about done. Like dinner. Why?
I have lightened up on some of my gold holdings, and done covered writes on the rest. Sadly I think, for now, we are about done.
Next week we can explore whether or not the general stock market is about to charge to a blow off top, or collapse from here. At the moment it’s not looking good.
Thanks for reading. More next week.