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Posts tagged ‘Call option’

Trading with Machholz up-date

Stock UP-date

BAC

For those of you who have been trading with me I suppose a hardy congrats is in order as we are now almost 100% up on my buy recommendation( Buy BAC at $7.10)  and this is taking into account all of the costs of hedging our positions over the last 12 months. The cost of hedging has in fact shown a 150% plus profit and so has not cost us anything. Where do we go from here? Remain hedged, as we can expect a lot of volatility in the coming months but “the trend is your friend “and as the stock climbs we can sell calls to pay for the hedging and then when we are in profit we can then continue to accumulate put options covering our exposure and profits, this system has been very good to us and there is no reason to make any changes.

To-days news regarding the earnings was no big deal except a breakout into a new trading range $14 to perhaps $16 but we were hedged just in case and will remain just bring on up the hedging with some of to-days profits.IE Roll the put positions and remember to buy way in the money puts $ first $ 15 and if the stock continues to advance then roll into the 16 etc the mirror call options are making just as much profit as you are losing on your put options and so you keep all the stock profit as you continue to trade through the year .end of year target is still $16.50 to $17.50 and end of next year should bring us nicely up to $21.50.

Good trading and remember always be Hedged!

Want to learn more?  Then take a look over at one of our recommended  excelent educators in this field  http://www.wealthbuilder.ie/

Thomás

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