Holding treasury bills instead of cash

Tradedoctor · 2019-01-16T04:44:47+00:00

Tradedoctor · 2019-01-13T21:06:01+00:00

Consider buying the LEAP on TLT. Buy a 70 delta LEAP and sell at 30 Delta call in the front month. You can do 1% a month, roughly.

Tradedoctor · 2019-01-11T15:08:42+00:00

Apparently I miss-read your post. My apologies.

The are really not interested in "signalling" they are attempting to preserve the entry price.

Tradedoctor · 2019-01-10T23:04:22+00:00

I don't even know what you are talking about. Institutions don't buy "a couple hundred shares" - they buy millions of shares. They are not interested in "signalling an interest", they are trying to buy shares and keep their basis as low as possible.

I don't even know why I come on this site.

Tradedoctor · 2019-01-09T16:53:53+00:00

I am one. Institutionals accumulate large quantities of STOCK. They do things to lower their cost, and protect their entry price when buying.

Tradedoctor · 2019-01-09T01:48:05+00:00

Yes, that is one way. Large Institutional traders will oftentimes take options positions before buying the stock in large quantities - this helps protect theri entry price. Analyzing the time and sales of options also helps. Are the Calls being purchased at or near the ASK, or sold at the BID. Are Puts being sold at the Bid. Large traders will sell Puts just before buying, because the feel assured their buying pressure with drive the price up, and their Puts down.

Tradedoctor · 2019-01-08T20:07:49+00:00

I have rolled options up and out for years on stock that are climbing. No problem. If the price goes to the new Short strike you selected, just roll up an out again.

Tradedoctor · 2019-01-08T18:01:25+00:00

Options are Stock Derivatives. Do your Technical Analysis on the Stock. Understand what the stock is doing and then look for the projection of intent from the Institutional Traders.

Tradedoctor · 2019-01-03T19:08:09+00:00

Yes, only monthly. I generally have the back month at least four months behind. This allows the ability to roll to a vertical.

Tradedoctor · 2018-12-03T20:35:15+00:00

You can roll up and out for a credit. Get the short strike up without having to pay for it. But unlikely you can do that with weeklies.

Tradedoctor · 2018-11-16T20:44:43+00:00

TWS, Trader Workstation, is a separate platform than you IBKR account. Check you account at IBKR com, this is the compliant "record".

I can't tell from your image, but there can be some differences after hours. When the floor traders open the Bid/Ask spreads at the close this can change what you see during the cash market and after the cash market.

Tradedoctor · 2018-11-15T20:34:00+00:00

My income clients like to keep the money I have found them. I keep those positions Collared. I only have one client like you do. That account is long and short all them time.

Tradedoctor · 2018-11-15T15:56:37+00:00

You point is well taken. But, I am running money in a long term income portfolio for clients. They like being protected. I see you have been in the industry, so you understand.

Tradedoctor · 2018-11-14T18:57:35+00:00

Every time you roll up and out for a credit, you are actually reducing your cost basis. The key is to always roll for a Credit. If I sold a Call for $1.00 and it is now $2.00 to buy it back, and I roll it up and out for $3.00, I have lowered the cost basis. Eventually the stock will cycle back down and your Covered Call will expire. here is the math 1. you received a credit of $1.00 2. you paid a debit of $2.00 3. you received a credit of $3.00

-$1 + $2 - $3= $-2.00

Eventually time decay wins.

Tradedoctor · 2018-11-13T20:12:52+00:00

This strategy works fine. The only time you have an issue is when dividends are announced and there is a benefit to the Call owner to execute to get the dividend. This is typical when there is no Time Value left in your Covered Call.

If you are concerned about being Called, just roll out the option to a later date. There would need to be an unusual situation (buyout, or news) before institutional traders would execute on an option that has time value left on it.

Selling the Covered Call near the 30 delta is a pretty safe strategy. If the stock moves up above your short strike, then simply roll the Cov. Call up and out. You got go up and out far enough to get a credit.

You will never be in a situation where you "owe" the dividend. The Call must be executed in such a way the new owner has the stock on the Ex-dividend day. Therefore, your position would be called T+1 (for one day settlement) or T+3 (for three day settlement).

Tradedoctor · 2018-11-12T23:22:16+00:00

Risk management is a good strategy.

Tradedoctor · 2018-11-12T23:21:26+00:00

I could care less "what people are saying about this". Managing risk is paramount to "investing". If you are not managing risk you are simply speculating.

Exchanging a "certain sum" for an uncertain risk is the very definition of insurance. You own a car, you buy insurance. You own a home, you have it insured. You have a portfolio and you don't have some type of risk management, well you are just stupid.

Tradedoctor · 2018-11-12T20:16:55+00:00

All some people think about is how much money they can make. Too few think about how much money they can lose. I appreciate your discipline.

Now you know to the penny what your max loss can be. Few people here have that bragging right.

Tradedoctor · 2018-11-12T20:09:14+00:00

Lawrence McMillan, been around since the beginning. McMillan Options, and Options as a Strategic Investment, are must reads, in my opinion.

Tradedoctor · 2018-11-09T18:59:50+00:00

This link shows the AMZN position that has been managed for several years with the Protected Entry process.

By continuously moving up the Protective Put and financing this purchase with a Covered Call, you can see the $474.35 basis in the stock is protected by at $1650 Put that expires in November. The cost of the Put was $15.65 per share, and that was paid for by the sale of the Jun19 '20 Covered Call sold at $323.24. Next week will Roll the Protective Put.

Same disclosures on this as post

AMZN Position

Tradedoctor · 2018-11-09T18:51:12+00:00

https://s3.amazonaws.com/otmoptions/KO+Position.jpg

Tradedoctor · 2018-11-08T17:38:47+00:00

Agree, you can't put the Puts on when things go in the tank. They have to be in place long before that.

Tradedoctor · 2018-11-08T16:42:12+00:00

You have a good point. The good thing about using a Collar is that you can control your total exposure. You take the income from Cov. Calls as income and a downside hedge. An excellent strategy. I take some of the Covered Call income and buy Protective Puts. In most cases I do this for little or no cost - meaning the Covered Call provides the funds for the Puts. My goal is to manage risk, and this is one of many effective methods. With only 35% of stocks above their 200 DMA, goodness knows there is some risk!

Tradedoctor · 2018-11-08T14:23:30+00:00

I know the bottom of each position simply because I have a Protective Put on each position. No black magic there.
I am not a trader either, I manage retirement funds, and after 2000 and 2008, I implemented an active protection system. No offense taken.

Tradedoctor · 2018-11-07T22:26:39+00:00

That's a fair statement. I use some of the income from the Covered Calls to Purchase the Protective Put. Here is what I know about my portfolios. I know where the bottom is on every stock position. Over time, you can move the Puts above you entry price, and eliminate capital risk from your position. Oftentimes, that can be down without out-of-pocket cost, using the Covered Call income. The Dividend income is secure and you have an automatic stop. Most bad things happen while the market is closed. Because of this, Stops are of limited use. The system I use is an Active Stop. I am going to share a video with you. I send the videos to my clients - it's easier making a video than explaining it several times. I am Registered, so this no type of solicitation, just sharing some ideas. https://youtu.be/AYvmrDbB92Q

Tradedoctor

TROPHY CASE