June 2010 Wrap Up

by Jeff on July 2, 2010

While the S&P 500 was down, both the Spread and Conservative accounts are up. The Spread account is easy to explain, while the Conservative account is a bit more difficult since it’s exclusively Covered Calls right now and almost all the underlyings are down for the month. But what I think is happening (without digging all the way down) is that the rolls from last month have put the cost basis for the underlyings below the current depressed price. So the premium collected for last months rolls and a few dividends are beginning to add up. I expected this to take some time and I’m glad it’s beginning to jell.

From 5,000 feet, the Spread account gained 5.01% and $2,570 in cold hard cash, and the Conservative account gained 0.22% and $75 in cash.

As I had mentioned in previous posts regarding major support for the S&P index, we can see that the last two days have held up, with Thursday finishing at 1027 and Friday at 1022. Remember, I had identified major support in the 1000-1020 range based on Fibonacci levels (see my Post What Could Happen).

This is a interesting zoom-in on the SPX chart from the close on Thursday. Notice how the candle bears a striking similarity to an oil drilling platform. Just an observation – I’m sure it means nothing.

Weeklys

In case you haven’t checked, the CBOE offers weekly expiration cycles on a few stocks and ETFs in addition to the major indices. They are: SPY, QQQQ, IWM, GLD, XLF, EEM, C, BAC, AAPL, BP, F and GOOG. I’m not sure I understand why some are these are there – like C; at $3.79 the stock is priced like an option with no time decay!

I have enjoyed playing SPY weekly for the last 3 expirations and it has worked out well. It’s easier to risk a consolidation or directional trade for 8 days rather than 25 or more.

Speaking of days, the CBOE announced this week that the weekly options will open on Thursday rather than Friday. This is to accommodate those traders who like to roll from week to week. I noticed that this Thursday and got in with a Condor on SPY (101/103/106/108) this is working out very nicely so far, and I get to capture 3 days of decay while we celebrate our country’s birthday this weekend.

For my US readers, enjoy our 224th birthday. For the rest, savor the 3-day weekend.

Tagged as: Condor, Covered Call, Performance, Weekly Expiration

  • Willot1

    Hey Jeff,
    Good weekend to you. Interesting about the weekly SPY that you mentioned. Are you posting these trades somewhere under your tables? Did not see them and just curious.
    Tim

  • http://theoptionguru.com/blog Jeff W

    Tim,

    Yes, they are posted. In the Closed 2010 you will find them designated with (weekly) – so the last 2 SPY trades for June are there. I neglected to update my In Play charts, but it's updated now.

    Shortly I will post a video on using TOS On Demand to demonstrate a way to play the weekly expirations.

    ◄ Jeff ►

  • Mikec

    Jeff, thanks again for your teaching. I have 2 questions:

    1. How do you enter the “On-Demand” feature with TOS?

    2. Are you sure that the arrows are “Persons Pivots”? When I put Persons Pivots on my chart they are dots above and below the current market, not arrows. It looks like your indicator is more of a moving average signal, such as when price closes above or below whatever moving average you have on.

    Thanks again Jeff!

  • http://theoptionguru.com/blog Jeff W

    Mike,

    Here are your answers:

    1. OnDemand is the orange button in the upper right. It's only available on live accounts, not Paper Money. When you press it, the system switches over to OnDemand, which is equivalent to Paper Money but on steroids.

    2. You have selected the “Person Pivot” study. Remove that and select “PPS”. That will give you the arrows.

    Click on the “Support/Chat” button in the “ACCOUNT INFO” section of TOS. Select the “Seminars” tab and do a search on “Person”. It will come up with 4 video chats, 3 of which are related to his indicator/study. These will help you to understand his study and how it can be used.

    Good luck and thanks for the comment.

    ◄ Jeff ►

  • mikejody

    Thank you very much, Jeff, that helped immensely.

  • Willot1

    Much too timely. Almost scary,
    Thanks Jeff for your interesting and educational materials.
    Tim

  • http://theoptionguru.com/blog Jeff W

    Happy to help, Mike

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  • http://theoptionguru.com/blog Jeff W

    Tim – thanks for the comment.
    ◄ Jeff ►

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  • http://theoptionguru.com/blog Jeff W

    Tim – thanks for the comment.nu25c4 Jeff u25ba

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  • http://theoptionguru.com/blog Jeff W

    Happy to help, Mike

  • Anonymous

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