August Trades

Trade History

• Converted 49.79 USD. Questrade gave me 49.46 CAD. Withdrew by ETF to bank account.
• Changed YPF Covered Call Strike 15.00 expiration October 20th Sell To Open order from Limit 0.50 to 0.25. Executed on July 30th.
• ROI 1.27% if it expires worthless.

Gut Check

• Changed my Sell-to-Open order from Limit 0.50 to Limit 0.25 as the price on YPF had dropped significantly and it was no longer reasonable to expect that sort of premium even though around the July options expiration it had been at that level.
• If it didn't fulfill, I was ready to risk a Strike 12.50 at 1.35 in January. If I got assigned, I'd more or less have broken even and at least got my money back to put into something that required less watching.
• Still stuck waiting for options expiration on the other stocks.
• ROI for the July 21 to August 18th options period is 0.17% because of dividend payments from CIM to both the Margin Account and the TFSA Account. The other open Covered Calls haven't expired yet.
• ROI for August to November at this point looks like 2.26%.

August Trades

Trade History

• Converted 49.79 USD. Questrade gave me 49.46 CAD. Withdrew by ETF to bank account.
• Queued a Sell To Open 3x YPF Covered Call Strike 15.00 @ 0.50, expiration October 20th. ROI 2.80% if it expires.

Gut Check

• Overall feeling depressed by the horrible loss of equity value. After the current calls expire, I won't be able to sell any PINK:PCXCQ (Patriot Coal) options. There's some talk about it being a grossly undervalued company at the moment, but things look so bleak.
• Portfolio value is down to about half. Yikes!

PCX shocker

Trades: None

Gut Check:
In May, I decided to stop obsessively watching the stock prices and just sell covered calls several months ahead but at "safe" strike prices -- that is, with a strike price of what I bought the stocks for.

Then I stopped looking. The Covered Call for YPF is expiring soon, and now that I've looked, I discovered that PCX has plummeted to around 23 cents -- from $6 when I bought it!
Damn.

My margin account is about 1/2 of its book value.

Not sure what to do except just to wait it out and see if it will ever recover. Can't even write Covered Calls on it.

Can't write Covered Calls on CIM either since the price is low and there aren't useful premiums to get.

Mostly just sitting. Might get to write a 12 to 15 cent Covered Call on YPF early next week for the TFSA account. We'll see.

Overall I think it's been too much watching and worry and I'm going to start pulling out as well as withdrawing money when I can.

June Trades

Trades: NONE

Gut Check:

• Stocks still down, but there were some spikes upward in there. If I had set my strikes incorrectly, I might have lost money. Still feels really passive not to take some risks, but at the same time, I'm not obsessively watching the markets. Starting to wonder if it's a good tradeoff by making a (lot) less money in exchange for safety.
• CIM dropped a lot after announcing a 2 cent decline in dividends (was 11 cents in the first quarter). No useful Covered Calls to write at this time. Waiting for it to go up again. IF it goes up again.

May Trades

Trades:

• May 26th: Bought 3x CIM @ 2.79 for both the Margin account and the TFSA account.
• Tried to short 300 shares of FB. Order rejected by QuesTrade -- "not enough shares to short"!

Gut Check:

• Sitting tight on CIM instead of selling any options, since ex-dividend day is probably coming up in June.
• Can't even do a fairly sure trade like FB. I'd psyched myself up all night to do it, since no matter what it's still speculative -- one press release by an analyst and it could reverse its downward trend and spike up in price, like last week with the Needham announcement.
• FB price is plunging again. Down over 50 cents from open, which was my cut-off to get out of the short position. Damn! If I could have shorted it, I'd be up an easy $150. Oh well.

May Trades

Trade History:

• Sold 5x DNDN Covered Call Strike 14.00 @ 0.25, expiration November 17th
• Sold 8x PCX Covered Call Strike 6.00 @ 0.17, expiration September 22nd
• Sold 8x RENN Covered Call Strike 7.00 @ 0.30, expiration October 20th
• Sold 3x YPF Covered Call Strike 15.00 @ 0.50, expiration July 21st
• Queued a buy for 3x CIM @ 2.75

Gut Check:

• Implementing the new trading strategy to remove speculation and spend less time watching the market instead of trying not to get assigned.
• Feeling nervous because this will commit me for several months for some of these stocks. There may be severe regret if they pop up from their current slump and shoot to fantastic values.
• DNDN sold at 0.25, but when I checked the quotes shortly after, it was in the ~0.30 range! Don't know why I got such a lousy price. :-( And for some reason it is showing 0.85 to close the position.
• 
  

Still considering new trading strategy

Ever since March, I've been stressed over writing Covered Calls on DNDN, trying to make 2% each month at option Strikes that were below what I paid for the stock, since the stock fell. And it fell a lot.

This month, the entire portfolio of stocks is down a lot, so except for YPF, I can't write a Covered Call for options expiring in June without choosing a Strike that is well below the price I paid per share. I might still get 2% ROI on each stock, but that involves a lot of watching, speculation, and stress. And I could be wrong, like I was in March and especially in April, where there was a huge 3% loss in just days.

If I were to remove speculation entirely, I could by selling Covered Calls for options expiring several months ahead. I would gain a certain amount of peace of mind and reclaim a lot of time watching the market and stressing out. In exchange, I am giving up potential gains -- capping any profit from the stocks going up a lot suddenly. And these are all volatile stocks to begin with.

After thinking about this more intently over the last couple of days, I think this will be my new strategy for stocks that have fallen a lot in value. It goes back to the original principles of not speculating and not spending a lot of time watching the markets.

There will be some idle cash in the portfolio because of this, and I think I will spend it on dividend-paying REITS. Looking at CIM at the moment.