Long LEAP Calls 2013

10 Jan14 YHOO 20 Call @2.00
10 Jan14 PFE 30      Call @0.45

Long Call strategy

1. Buy:
      LEAPs, timing: 6-18 months out, cost: $1-2, level: OTM by two intervals, count: 5-10

2. Sell when:
      Either half the time has elapsed or when the underlying reaches par, whichever is earlier

3. Build up:
      If the underlying reaches par and continues to rise, take profit on current LEAP and add more long LEAP calls with the same strategy.

Short Puts: Rows of Marching Soldiers

Strategy: Sell regular near-term short puts for solid performers, use the net credit to make speculative purchases of long calls for big payoff.

Short puts:
Like a row of marching soldiers: progressive tiered short puts for solid companies, 2-4 months out with a strike at 20% below current level. Net credit each position around 1K, net risk: 10-15K
Use 50% of the net income to make long bets on promising companies

Long calls:
Near-the-money long calls, 4-6 months out, invest around 0.5K, for promising companies or based on overall market and sector performance
Sell when call is 1-2 months away, unless it's almost worthless at that point

Do this repeatedly

Skewed Iron Condor (2) - TOL

The previous trade, in Pictoral form:

This is a 4-leg trade:

The profit & loss picture looks like this:

Skewed Iron Condor - TOL

TOL:
Curve-fitting: goes up by 2/mo

  Long Mar 2013 38 Call Ask: 2.90 x 1

  Short Dec 31-21 Put credit: 0.70 x 3
  Short Dec 32-22 Put credit: 0.90 x 3

  Short Dec 47-42 Call credit: 0.40 x 2
  Short Dec 46-41 Call credit: 0.55 x 2

   Short Dec 42 Call credit: 0.55

2.10 + 0.80 - 2.90 = 0.0
2.10 + 0.55 - 2.90 = - 0.25

  Mar 2013 38 Call / Sell Dec 2012 42 Call debit:  -2.35
39-44 debit: -2.30
38-41 debit:  -2.15
39-42 debit: -1.95


Total position:
  Buy Mar 2013 38 Call / Sell Dec 2012 42 Call:  -2.35  x 2
  Sell Dec 2012 31-21 Put Credit: 0.70 x 3 = 2.10 x 2

  Mar 2013 38 Call Ask: 2.90
  Dec 2012 42 Call Bid: 0.55


Results, By Dec:
=> Below 31 lose money up to 21, max: 6050  --> can roll put spread downwards
=> Between 31 and 38: loss: 50
=> Above 38: gain money up to 42, max: 750  --> can roll short call upwards

Evaluate weekly; if it gets half-way to the short positions, roll those out again.

Short Puts Screening

Selling high-priced near-term OOM Puts, possible short OOM Calls

RAX:

Lower bound 30 (aggr: 35), upper bound 60 (aggr: 55)

Earnings call: May 2

RVBD:

Lower bound 30 (35 ok), upper bound 55

Earnings call: Apr 25

WTW:

Recently gapped up; pass

OPEN:

Lower bound 80 (aggr: 90), upper bound 120

Earnings call: May 4

AMZN:

Lower bound 160

Earnings call Apr-end, Analyst downgrade

Strategy: Short Expensive Near-term OOM Puts

Next plan: sell near-term Puts that are way out of the money, yet expensive.

Filter for finding candidate Puts:

1. Underlying is on a long-term uptrend (or at least steady). Wouldn't mind owning underlying at a fundamental level.
2. Underlying price, between 20-80.
3. Near-term put, 1-2 months out and comfortably out of the money, priced > $1.00
4. Ideally strike price is below significant support level.
5. Check for announcement dates of financial results.
6. Reduce collateral requirements by buying Puts that are further OOM (buy extra).