May 2013 Expiration : Naked Put Selling

Summary:

Notable this month was a surprise drop in Fusion-IO (FIO) My response was to sell eight (8) out-of-the-money puts to take advantage of elevated premiums, as well as to offset paper losses on my three (3) now in-the-money puts.

May 2013 Puts Short:	13
Face Value:	$25,700
Margin:	$9,850
Hope to Roll:	9
Hope will Expire:	4
Expect Assignment:	0
Change in risk:
Change in margin:
Realized Gain/Loss:

Diebold (DBD)

• -1 May $30 P ($550 margin)

I hope to roll out to Jun for credit.

DBD at close of trading Friday May 10: $30.69
Mon May 13: $30.75
Tues May 14: $30.4925
Wed May 15: with DBD at $30.28 I rolled the 18 Put out to June for .50 credit ($$44.10 net of commissions).

iShares MSCI South Korea Capped Index (EWY)

• -1 May $55 P ($950 margin)

I hope to roll.

Fri May 10: $57.05
Mon May 13: $56.79
Tues May 14: $57.82
Wed May 15: $57.60
Thur May 16: $58.12
Fri May 17: $58.17
expired.

Fusion-IO (FIO)

• -1 May $18 P ($600 margin)
• -1 May $14 P ($200 margin)
• -1 May $13 P ($150 margin)

I hope to roll the 18 out to Jun for credit.
The $13 and $14 I hope will expire.

Fri May 10: $15.05
Mon May 13: $14.51; with FIO at 15.08 I rolled the 18 Put out to June for .35 credit ($29.10 net).
Tues May 14: $15.12
Wed May 15: $14.98
Thur May 16: $14.83
Fri May 17: $14.79
$13 and $14 puts expired.

Gold Miners ETF (GDX)

• -1 GDX May $29.5 P ($700 margin)

I hope to roll for credit.

Fri May 10: $29.81
Mon May 13: $29.03
Tues May 14 with GDX at $29.06 I rolled the $29.5 P out to June for .65 credit ($59.10 net of commissions).

General Electric (GE)

• -1 GE May $22 P ($700 margin)

I hope to roll for credit.

Fri May 10: $22.90
Mon May 13: $22.85
Tues May 14: $23.01
Wed May 15: $23.24
Thur May 16: $23.27
Fri May 17: $23.46
expired.

Global X Silver Miners ETF (SIL)

• -1 SIL May $14 P (IRA)

I hope to roll for credit.

Fri May 10: $14.44
Mon May 13: $14.07
Tues May 14: with SIL at $14.02 I rolled the May $14 P to June for .40 ($34.10 net).

iShares Silver Trust (SLV)

• -1 SLV May $22.5 P (IRA)

I hope to roll for credit.

Fri May 10: $22.98
Mon May 13: $22.83
Tues May 14: $22.57
Wed May 15: with SLV at $21.83 I rolled the May $22.5 P to June for .50 ($44.10 net).

Silvercorp Metals (SVM)

• -2 SVM May $3 P (IRA)

I hope to roll for credit.

Fri May 10: $2.91
Mon May 13: $2.82
Tues May 14: $2.77
Wed May 15: $2.60
Thur May 16: $2.63 ; with SVM at $2.61 I rolled 1 May $3 P to September for .20 ($14.10 net)
Fri May 17: with SVM at $2.56 I rolled 1 May $3 P to September for .17 ($11.10 net)

Western Union (WU)

• -1 WU May $15 P (IRA)

I hope will expire.

Fri May 10: $15.99
Mon May 13: $16.21
Tues May 14: $16.37
Wed May 15: $16.53
Thur May 16: $16.42
Fri May 17: $16.65
expired.

Financial Sector SPDR (XLF)

• -1 XLF May $18 P ($250 margin)

I hope will expire.

Fri May 10: $19.25
Mon May 13: $19.31
Tues May 14: $19.64
Wed May 15: $19.82
Thur May 16: $19.69
Fri May 17: $19.95
expired.

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A Fourth Stock Screen on Dividend Stocks (DGR 4)

Once again, I am looking for low-priced put-selling stocks.
My definition of low-priced is $20, but $40 will do.
A good put-selling stock should have $1 strikes, daily put volume in the hundreds, and a bid/ask spread of less than a nickel.

Methods:

1. Sort by Price (Column H); Zap 284 rows with Price $40 or more (186 rows remaining)
2. Zap 35 rows with Yield (Col I) less than 2% (151 rows remaining)
3. Zap 25 rows with Most Recent Increase (Col L) less than 2% (126 rows remaining)
4. Zap 15 rows with overdue increase (Col M) (111 rows remaining)
5. Zap 63 rows with low Market Cap (Col AH) = low OI/Volume (48 rows remaining)
6. Manually check for strikes, Volume, OI

Here is the resulting list:

Name	Symbol	Price 5/6/2013
Safeway Inc.	SWY	$23.74
Intel Corp.	INTC	$23.91
CSX Corp.	CSX	$25.23
Xcel Energy	XEL	$30.68
Omega Healthcare Investors	OHI	$34.67
Microsoft Corp.	MSFT	$33.75
PPL Corp.	PPL	$31.98
Lazard Limited	LAZ	$32.66
Archer Daniels Midland	ADM	$33.88
Republic Services Inc.	RSG	$34.67
Sysco Corp.	SYY	$34.33
ConAgra Foods Inc.	CAG	$35.43
Principal Financial Group Inc.	PFG	$36.99
Texas Instruments	TXN	$37.04
Linear Technology Corp.	LLTC	$37.79
Altria Group Inc.	MO	$36.08
Coca-Cola Enterprises Inc.	CCE	$37.04
AT&T Inc.	T	$37.09
Xilinx Inc.	XLNX	$38.01
Williams Companies	WMB	$37.30
Teva Pharmaceutical Industries	TEVA	$38.31
Brinker International	EAT	$39.79
Bemis Company	BMS	$39.40

Premium Selling Before Earnings Announcements

The following companies I follow are announcing results this week:

Cliffs Natural Resources Inc. (CLF) $17.63 Earnings announcement 4/24/13

Premium	comm	sell -1 CLF 26AprW P	Net	Risk	Margin	RoM	IV	Volume
$15	2.95	$14.50	$12.05	$1,450	$147	8.23%	122%	349
$22	2.95	$15.00	$19.05	$1,500	$152	12.57%	119%	597
$33	2.95	$15.50	$30.05	$1,550	$156	19.32%	118%	980
$42	2.95	$16.00	$39.05	$1,600	$191	20.43%	114%	414
$56	2.95	$16.50	$53.05	$1,650	$241	22.00%	111%	122
$74	2.95	$17.00	$71.05	$1,700	$292	24.37%	109%	755
$96	2.95	$17.50	$93.05	$1750	$341.6	27.24%	107%	133
$122	2.95	$18.00	$119.05	$1800	$355.1	33.53%	106%	254
$152	2.95	$18.50	$149.05	$1850	$355.6	41.92%	106%	55
$187	2.95	$19.00	$184.05	$1900	$356.1	51.68%	107%	41
$224	2.95	$19.50	$221.05	$1950	$360.1	61.39%	111%	13
$265	2.95	$20.00	$262.05	$2000	$367.1	71.38%	122%	40

E. I. du Pont de Nemours and Company (DD) $49.19 Earnings announcement 4/23/13

ATM IV : 24%

Fusion-io, Inc. (FIO) $14.41 Earnings announcement 4/24/13

Premium	comm	sell -1 FIO May P	Net	Risk	Margin	RoM	IV	Volume
$15	2.95	$11.00	$12.05	$1,100	$113	10.71%	84%	1
$30	2.95	$12.00	$27.05	$1,200	$125	21.64%	82%	27
$60	2.95	$13.00	$57.05	$1,300	$152	37.48%	81%	2,379
$105	2.95	$14.00	$102.05	$1,400	$250	40.87%	81%	73
$56	2.95	$15.00	$53.05	$1,500	$241	22.00%	79%	229
$155	2.95	$16.00	$152.05	$1,600	$293	51.86%	75%	2

Molycorp, Inc. (MCP) $5.20 Earnings announcement 5/6/13

Take a look at selling weeklys if/when they open up. (Right now the only weeklys are 26 April.)

Mondelez International, Inc. (MDLZ) $31.68 Earnings announcement 5/7/13

ATM IV : 24%

Regions Financial Corporation (RF) $7.83 Earnings announcement 4/22/13

ATM IV : 30%

Sprint Nextel Corp. (S) $7.17 Earnings announcement 4/23/13

ATM IV : 37%

Seagate Technology Public Limited Company (STX) $34.44 Earnings announcement 4/30/13

Take a look at selling weeklys if/when they open up. (Right now the only weeklys are 26 April.)

The Western Union Company (WU) $14.47 Earnings announcement 4/29/13

ATM IV : 30%

Xerox Corporation (XRX) $8.46 Earnings announcement 4/22/13

ATM IV : 40%

YCharts Chart Browser

Stumbled upon YCharts Chart Browser this morning. You can down-arrow through all the stocks in the Dow Jones Industrials or the S & P 500 or, what's really cool, the stocks held by "Investing Pros" like the Bill and Melinda Gates Foundation, Boone Pickens Portfolio, George Soros Portfolio, Warren Buffet Portfolio and 14 others, including a catch-all Popular Hedge Fund Stocks.

Some low-price names in the Bill and Melinda Gates Foundation portfolio: Cemex (CX), Diamond Foods (DMND), Greater China Fund Common (GCH).

April 2013 Naked Put Selling Snapshot and Review

I had an order rejected today because I had insufficient margin; that's warning me I have too much risk on. I am looking to close some positions early and hoping that some of my April naked puts will expire worthless.
My biggest positions are VIX, where I hope to close for pennies; FIO which was a mistake; INTC which I'm very comfortable with; NUE, where I got in too early but expect to see a bottom soon; CLF, where I got in too early; EWY, which is a good position but too big; and AMX where I also got too big.
Many of my open positions are in stocks that I can do without, i.e. that are not core holdings. I got into these positions because of special situations, like a big sell-off in what I thought was a market over-reaction to bad news. These second-stringers are: AMX, CAH, CLF, CY, DBD, FIO, RF, STX, SVM, SWHC. They may be good stocks, but I don't want to spend a lot of time tracking them and selling puts on them.
I consider EWT, EWY, INTC, NUE, OMEX, VIX, XLB and XLF as worth continuing, and would like to add EEM, IWM, MSFT, and SPY.

Summary:

Puts Short:	43
Face Value:	$82,400
Margin:	$19,430
Hope will Expire in April:	7; margin $2,950	5; margin $2,100
Hope to Close for Pennies:	10; margin $3,280	7; margin $2,730
Hope to Close Early:	3; margin $1,600	4; margin $2,260
Expect to Roll in April:	6	7; margin $4,550

America Movil (AMX) : $3,800 Risk : $900 Margin

• -2 Apr $19 P ($450 + $450 margin)

AMX at close of trading Tuesday Apr 02: $20.71
Hope these will expire April 19.
Expired!

Cardinal Health (CAH) : $4,200 Risk : $1,000 Margin

• -1 May $42 P ($1,000 margin)

CAH at close of trading Tuesday Apr 02: $42.05
Hope to buy this in for $70, about half what I sold it for.
On Thursday 4/11 (CAH at $43.66) buy to close CAH May $42 Put @ .70 ($73 with commissions).

Cliffs Natural Resources (CLF) : $8,600 Risk : $2,000 Margin

• -1 Oct $17 P ($500 margin)
• -1 Jun $17 P ($500 margin)
• -1 May $20 P ($550 margin)
• -1 May $16 P ($250 margin)
• -1 Apr $16 P ($200 margin)

CLF at close of trading Tuesday Apr 02: $18.18
Hope the Apr $16 Put will expire April 19.
Expired!

Cypress Semiconductor (CY) : $900 Risk : $160 Margin

• -1 Jun $9 P ($160 margin)

CY at close of trading Tuesday Apr 02: $10.65
Hope to close early for pennies.
Nope.

Diebold (DBD) : $5,500 Risk : $850 Margin

• -1 May $30 P ($600 margin)
• -1 Aug $25 P ($250 margin)

DBD at close of trading Tuesday Apr 02: $30.05
Hope to buy back the Aug $25 Put for $20 (25% rule).
Nope.

iShares MSCI Taiwan Index (EWT) : $1,300 Risk : $200 Margin

• -1 Apr $13 P ($200 margin)

EWT at close of trading Tuesday Apr 02: $13.41
I expect to roll for credit.
Expired! (Credit for rolling was too low to justify keeping the risk on.)

iShares MSCI South Korea Index (EWY) : $11,000 Risk : $1,800 Margin

• -1 Apr $56 P ($1,000 margin)
• -1 Apr $54 P ($800 margin)

EWY at close of trading Tuesday Apr 02: $58.44
Hope the 54 will expire April 19; expect to roll the 56 for credit.
On Tuesday 4/16 (EWY at $56.45) rolled EWY Apr $56/May $55 Put @ .60 ($54 after commissions).
Apr $54 Put Expired!

Fusion-io (FIO) : $5,100 Risk : $1,650 Margin

• -1 Jun $16 P ($500 margin)
• -1 Jun $17 P ($550 margin)
• -1 Apr $18 P ($600 margin)

FIO at close of trading Tuesday Apr 02: $$15.73
I expect to roll the Apr 18 for credit.
On Tuesday 4/16 (FIO at $14.17) rolled FIO Apr/May $18 Put @ .30 ($24 after commissions).

Intel (INTC) : $4,300 Risk : $2,000 Margin

• -1 Jan'14 $20 P ($400 margin)
• -1 Oct $23 P ($700 margin)
• -1 Apr $22 P ($500 margin)
• -1 Apr $21 P ($400 margin)

INTC at close of trading Tuesday Apr 02: $21.45
I hope the Apr 21 will expire; I expect to roll the Apr 22 for credit.
On Friday 4/12 (INTC at $21.58) rolled INTC calendar Apr/May $22 Put @ .32 ($26 after commissions).
On Wednesday 4/17 (INTC at $22.06) btc INTC Apr $21 Put @ .02 ($2).

Nucor (NUE) : $8,700 Risk : $1,900 Margin

• -1 Jul $43 P ($900 margin)
• -1 Apr $44 P ($1,000 margin)

NUE at close of trading Tuesday Apr 02: $43.65
I expect to roll the Apr 44 for credit.
On Wednesday 4/3 (NUE at $44.22) rolled diagonal NUE Apr $44/May $43 Put @ .06 ($0 after commissions).

Odyssey Marine Exploration (OMEX) : $700 Risk : $500 Margin

• -1 Jun $3 P ($200 margin)
• -1 Jun $4 P ($300 margin)

OMEX at close of trading Tuesday Apr 02: $3.18

Regions Financial (RF) : $700 Risk : $100 Margin

• -1 May $7 P ($100 margin)

RF at close of trading Tuesday Apr 02: $8.04
Hope to close early for pennies.
Nope.

Seagate (STX) : $9,300 Risk : $1,000 Margin

• -1 Jun $30 P ($350 margin)
• -1 Apr $31 ($300 margin)
• -1 Apr $32 P ($350 margin)

STX at close of trading Tuesday Apr 02: $36.28
I hope the Apr Puts will expire; hope to buy the June 30 for $39 (25% rule).
On Tuesday 4/16 (STX at $35.51) btc STX Apr $31 Put @ .05 ($5).
On Tuesday 4/16 (STX at $35.26) btc STX Apr $32 Put @ .05 ($5).

Silvercorp Metals (SVM) : $1,300 Risk : $900 Margin

• -2 Jun $4 P ($250 + $250 margin)
• -1 Jun $5 P ($400 margin)

SVM at close of trading Tuesday Apr 02: $3.50

Smith & Wesson (SWHC) : $500 Risk : $70 Margin

• -1 Jan'14 $5 P ($70 margin)

SWHC at close of trading Tuesday Apr 02: $8.74
Hope to buy this back for pennies.
Not yet.

S&P 500 Volatility Index (VIX) : $9,100 Risk : $2,950 Margin

• -7 Apr $13 P ($2,950 margin)

VIX at close of trading Tuesday Apr 02: $12.78
Hope to buy these back for pennies.
On Wednesday 4/3 (VIX at $14.04) btc 2 VIX Apr $13 Put @ .25 ($56 total w commissions).
On Friday 4/5 (VIX at $15.04) btc 1 VIX Apr $13 Put @ .15 ($18).
On Tuesday 4/16 (VIX at $14.49) btc 4 VIX Apr $13 Put @ .05 ($20 total).

Materials Sector SPDR (XLB) : $3,800 Risk : $750 Margin

• -1 Apr $38 P ($750 margin)

XLB at close of trading Tuesday Apr 02: $38.46
I expect to roll this for credit.
On Wednesday 4/17 (XLB at $37.53) rolled XLB Apr/May $38 Put @ .48 ($42 after commissions).

Financial Sector SPDR (XLF) : $3,600 Risk : $700 Margin

• -2 Apr $18 P ($350 + $350 margin)

XLF at close of trading Tuesday Apr 02: $18.21
I expect to roll these for credit.
On Wednesday 4/17 (XLB at $18.00) rolled XLF Apr/May $18 Put @ .24 ($18 after commissions).
On Wednesday 4/17 (XLB at $18.05) rolled XLF Apr/May $18 Put @ .26 ($20 after commissions).

April Outlook: Cautious, Bullish

Markets are at all-time or multi-year highs, depending on whether you adjust for inflation. I believe markets will run up a bit more, but want to be prepared for exogenous shocks or a 5% correction.

So I'm content to roll over naked puts in core holdings, and open new positions in special situations, but I will look to close those new positions quickly.

Long CAH, NUE

Today Nucor Steel (NUE) traded as low as $44.90, off nearly 2.5%, on no news that I can find. (Ex-div date was 3/25, no Yahoo! Finance or Google Finance news.)
With NUE trading at 45.02, I sold an April $45 Put for $1.01 ($98 net of commissions). Cost if assigned: $44.17.

Also, finally went long Cardinal Health (CAH). After falling 10% on 3/19 (lost their contract with Walgreens) CAH has traded from $43.25 to 41.55. It may have found its bottom on Friday March 28 at $41.65, and was up 0.5% on Monday April 1. With CAH trading at 41.76, I sold the May $42 Put for $1.40 ($137 net). Cost if assigned: $40.78.

Naked Put Selling : March 2013 Expiration

Summary:

March 2013 Puts Short:	17
Face Value:	$24,550
Margin:	$7,800
Rolled:	12
Expired:	3
Assigned:	2
Change in risk:	-$8,600
Change in margin:	-$3,465
Realized Gain/Loss:	$155.35

America Movil (AMX) -1 Mar $22 P ($500 margin)

AMX at close of trading Friday Mar 8: $21.44
Mon Mar 11: $20.96
Tues Mar 12: $20.55
Wed Mar 13: $19.00
Thur Mar 14: $19.37
Fri Mar 15: $18.62; assigned 100 shares @ $22 ($2,215 with commissions).

Diebold (DBD) -1 Mar $30 P ($700 margin)

Fri Mar 8: $28.73
Mon Mar 11: $28.99
Tues Mar 12 (DBD at $29.12) rolled out to May $30 Put for .85 ($79 net of commissions).

iShares MSCI Malaysia Index Fund (EWM) -1 Mar $15 P ($1,500 margin : IRA)

Fri Mar 8: $14.75
Mon Mar 11: $14.73
Tues Mar 12: $14.68
Wed Mar 13: $14.57
Thur Mar 14: $14.52
Fri Mar 15: $14.40 ; assigned 100 shares @ 15 ($1,515 with commissions).

Fusion-IO (FIO) -1 Mar $18 P ($450 margin)

Fri Mar 8: $17.03
Mon Mar 11: $17.31
Tues Mar 12 (FIO at $17.24) rolled out to Apr $18 P for .56 ($50 net).

Intel Corporation (INTC) -1 Mar $21 P ($400 margin)

Fri Mar 8: $21.57
Mon Mar 11: $21.69
Tues Mar 12: $21.64
Wed Mar 13: $21.66
Thur Mar 14: $21.65
Fri Mar 15: $21.38 ; expired.

Kronos Worldwide (KRO) -2 Mar 17.5 P ($400 margin)

Fri Mar 8: $17.30
Mon Mar 11: $17.17
Tues Mar 12: $17.37
Wed Mar 13: $16.81
Thur Mar 14 (KRO around $17.10) rolled out to Apr for .65 and .70 ($59 and $64 net).

Odyssey Marine Exploration (OMEX) -2 Mar $3 P ($300 margin)

Fri Mar 8: $3.52
Mon Mar 11: $3.46
Tues Mar 12: $3.46
Wed Mar 13: $3.39
Thur Mar 14: $3.39
Fri Mar 15: $3.29 ; expired.

SunOpta (STKL) -1 Mar $7.5 P ($750 margin : IRA)

Fri Mar 8: $6.80
Mon Mar 11: $6.66
Tues Mar 12: $6.71
Wed Mar 13: $6.71
Thur Mar 14 (STKL at $6.67) rolled out to Jun for .10 ($4 net).

S&P 500 Volatility Index (VIX) -7 Mar $13 P ($2,800 margin)

Fri Mar 8: $12.59
Mon Mar 11: $11.56
Tues Mar 12: $12.27
Wed Mar 13: $11.83
Thur Mar 14: $11.30
Fri Mar 15: $11.30
Mon Mar 18 (VIX at 12.76, 12.71) rolled out to Apr for .05, .10 (3 at -$1 net, 4 at $4 net). Tue Mar 19: VIX trades up to 15.03, and I could have closed all for .05 : Nerds!!