February Trades

Trades

• Deposited 120 CAD, which QuesTrade converted to 118.73 USD

Gut Check

n/a

DNDN stock fell because of boring news?

Trades:

• Queued Buy To Close 5x DNDN at Strike 14.00 Limit 0.01.

Gut Check:

• Late last week I was worried that the DNDN earnings announcement might result in bad news and stock prices falling like a rock. Turns out it was just boring news that made DNDN drop. It started off slightly high at the start of the trading day, but has since plummetted to less than $12.00.
• This is one of the risks of making money with Covered Calls -- While you're waiting for expiration or assignment, your stock takes a dive. It's not a serious one here, but it's annoying enough because if the price doesn't pick up, I won't get assigned and might end up holding the stock.
• If I get to buy back my Covered Call at 0.01, my effective share price after having made some money with the earlier Covered Call would be 12.63 at basically 0% profit.
• I have almost 3 weeks to expiration if I can't buy it back. Enough time for the price to inch back up?

DNDN earnings announcement on Monday

Trades: None.

Gut Check:

• DNDN is scheduled to review their 4th Quarter 2011 on Monday, February 27th. People are talking about either a big jump or a big drop in share price, depending on what happens. If it really does sink, I'll try to buy it back at minimum and either write a Covered Call for the Weekly ending next week, or just wait. If I buy it back at 0.01, my effective purchase price per share is 12.63, so it'd have to fall pretty hard to bother me.
• Whatever happens, I'm locked in for the moment. Will just have to wait and see.

February Trades

Trades:

• Sell to Open 5x DNDN Covered Call at Strike 14.00 Limit 1.40 -- order filled.
• After recalculating the funds left in my account after Questrade finally cleaned up the options assignment issue and after factoring in final commissions, ROI looks like 10.86%.

Gut Check:

• Price of DNDN shot up -- as expected. Yesterday was just a low day. Pre-market saw it as high as 14.22 or thereabouts. It's still above 14.00 and the Covered Calls are at over 1.60.
• Was tempted to reset my limit price higher, but that would be speculating too much. I might have missed my target again, lost time (which also means losing a bit of option price), and stressed out.
• Feeling relieved.
• In part because I'm now locked into my positions until options expiration. Can't look back now, but the ROI I got isn't shabby, especially compared with the amount of time spent, and the other returns I can get from other investments.
• I hit my target of 1.40 and my ROI of close to 10%. I shouldn't be too greedy. Just yesterday I was worried I might have reset it as low as 1.20! Got to get a handle on the butterflies in my stomach.
• Final ROI figure will depend on how much my 120 CAD converts to USD. Right now the exchange rate is 1.000 with Questrade, but the money hasn't reached them yet as I telephone-banked it only yesterday morning.

DNDN price drop -- but outlook positive?

Trades:

• None, but still have an order queued: Sell to Open 5x DNDN Covered Call at Strike 14.00 Limit 1.40.

Gut Check:

• Could have sold the call at 1.30 early this morning right after I bought the stock at 13.95, but I was feeling conflicted. It had happened before: A short-term / 1 day price drop and I traded anyway, only to discover I was selling my Calls on the lowest trading day of that options period. There's still about 3 weeks left.
• I dug around and it looks like the outlook on DNDN is still bullish. Bid on the Strike 14.00 Call closed at 1.21. It has to climb 19 cents to reach my target.
• I'm tempted to reset to 1.30, which still gives me ~9% ROI. I'll hold on and see what happens tomorrow. As of 7:56 PM EST, DNDN had climbed from a close of 13.73 to 13.84. Might take off above 14.00.
• If I have to sell at 1.20, that's still ~8% ROI (and about $100 more into margin).
• Using limit orders necessarily involves speculation -- and maybe too much watching. I think next time around I might sacrifice a few % profit for less stress.
• In other news... My Questrade account was glitched and I mentioned that on Twitter, to which I got a response.
• Anyway, when I logged in early this morning (Feb-22), it looked like everything had been cleared up. Great.
• In the afternoon, around maybe noon, I got a call from Questrade apologizing for the glitch and asking me to look in on my account.
• I feel it's a bit late -- I could have used some notification, when over 99% of my money just disappears from my account -- but at least they did call to apologize and check in. Better late than never, as they say. Nowadays, it's not uncommon for companies to fall into the "never" category.

February Trades

Trades:

• ACHN and ATPG Covered Calls auto-assigned over the weekend. Back to cash.
• Queued an order to Buy 500 shares of DNDN at 13.95, good till Friday Feb-24.
• If the order is filled, I will be in margin over 700 and will need the Covered Call to bring that down nicely to about $70, whereupon I will top it up with cash.
• If I can get the order filled, I'll queue a Sell to Open a Covered Call at Strike 14.00 and limit price 1.40.
• Estimated ROI 9.81% (expires worthless) to 9.92% (assigned) when compared to purchase price (rather than capital committed).

Gut Check:

• Feeling very relieved after the problem with my Questrade account looks finally cleared up when I logged on this morning.
• Missed a Covered Call opportunity with CEDC that was about ROI 10%. Trying for DNDN. More volatile, pricier stock. Closed moving up yesterday at 13.99. Pre-market has it up a few cents. I'm going to try to get it at a little less, then queue a Covered Call. Otherwise, I'll look at it again Friday to see if the stock has rocketed up too far. Fingers crossed!

Questrade Glitches -- Can't trade till who knows when

Trades: UNABLE TO TRADE

Gut Check:

• I logged onto the Questrade trading platform, IQ Beta, and discovered I had only $14 to my name. WTF!? Turns out there was some kind of problem with my Covered Call assignments and they have to manually fix it. Meanwhile, my buying power is about $42. God knows when this will be fixed.
• I also discovered a retroactively applied $12.95 commission on my BAC assignment. I had seen that transaction line in my trade history WITHOUT the commission, but it was apparently retroactively applied to the same transaction line maybe on Jan-25th, the settlement date. This is very confusing for me, since what is published as a completed transaction should no longer be changed. Instead, an adjustment line should have been added. Anyway, it got sorted out -- so now I have to recalculate my ROIs...

13.01% return for February, and back to cash

Trades:

• Over the weekend, both ATPG and ACHN Covered Calls got Assigned. Net ROI for Jan-23 to Feb-21 is 13.01%! Hurrah!
• EDIT: Will be 12.57% after commissions on option assignment that will eventually be applied.

Gut Check:

• Back to cash and all set to go, except it's President's Day in the US. NYSE not open. Boo!
• Presently sorting out what looks like a retroactive $12.95 commission charge when my BAC Covered Call got assigned last month. Strange... Waiting for customer service to get back to me.
• Got my eye on TSL, DANG, PCX, and CEDC. Will watch what happens when the markets open tomorrow before ordering anything.

Prices gapped up!

Trades: None

Gut Check: Relieved!

• After stock prices for both ACHN and ATPG fell over the February options period, I was worried that I'd be stuck with both stocks and my Covered Calls might expire un-assigned -- yesterday, especially, with ACHN looking really bleak closing at less than 9.00! At such a low price, the March calls would not have had a really good premium attached to them (not bad per se -- but not 10%+ of my purchase price).
• The way things are going today, it looks like both positions will expire In-The-Money and get assigned. I'll lose a bit (about 16 cents) per share on ATPG, but I've held it a long time and wouldn't mind going back to cash.
• Going forward, I think I want to aim to more aggressively be assigned and return to cash. As well as use limit orders to set ROI% targets instead of personally watching the market for a good price. Will see how the market closes today!

Might not be assigned after all

Trades: None.

Gut Check:

• Holy shit! ACHN just fell by a dollar and is now at less than my Covered Call strike price of 10.00. Looks like I might not be assigned after all. But if the bid price for a March Strike 10.00 Call is still over $1.00, I can just write another for over 10% ROI.
• ATPG still low but Strike 7.00 Call also has a high premium. Luckily I didn't buy back my call. I'd have just chopped off 5% profit for nothing. Good thing I stuck to not speculating on price.
• Cruising into options expiration in 1-1/2 weeks now...

ATPG sinks, tempted to swing trade

Trades:

• Last week: Cancelled Limit Order Buy-to-Close ATPG Covered Call.
• January 27th: Topped up account by 200 CAD. Converted to 196.52 USD.

Gut Check:

• ATPG was on the decline but still above my Covered Call Strike of 7.00. This morning, it gapped down A LOT and opened at 6.88. Has been going down. Presently 6.58. I was tempted to buy back my call at a modest profit and re-sell at Strike 7.00 but with a limit price of 1.00.
• The problem is, there's only 2 weeks left, and I don't know the reason it gapped down. Maybe some development in the investigation into possible securities law violations that I don't yet know about? Insiders supposedly selling and that probably triggered a big sell-off and price drop today.
• The payoff is 2:1 -- I give up 5% now in the hopes of getting 10% later. It's speculating. In the end, I decided I didn't want to do it. I'm not supposed to be a speculator.
• Let it sink. If it does, I keep my profits AND keep my stock -- i.e., back to my trading strategy.