AMZN Calls

Alright, I'm gonna do another one with Amazon(AMZN). AMZN is another one that is always a risk to run away from me, but that volatility also leads to better option pricing.

• Sell to Open: 2 AMZN Jun 18 190.0 Call @ $0.16
• Buy to Open: 2 AMZN Jun 18 200.0 Call @ $0.02

This is more typical of a expiration week trade for me. Often times, I'll add another leg with an out-of-the-money Bull Put Spread(something like a 175/165 strike - ). This type of trade is called an Iron Condor. Since in the worst case scenario, you could still only lose on one side it can be a nice way to bring in some extra premium without adding any margin requirements. The bears seem to have some control at the moment though, so I don't like being exposed to the short side of an overvalued momentum stock like Amazon or First Solar.

The Numbers

• Cash: +$28
• Short Option: -$34
• Long Option: +$2
• Margin: -$2000

Expired!

FSLR Calls

Since it's option expiration week, I'd normally be trading a lot more, but since I've been busy with non-trading work, I haven't had much of a chance. This morning(or afternoon if you're on the east coast) I sold some FSLR calls at the $125 strike though. Normally I would turn this into a spread by buying some $135 or $140 calls as well, but the volume and pricing wasn't there today. These sort of trades are my bread-and-butter. Less than two days until the options expire and the stock would have to rise by almost $7 in that time for me to lose money. FSLR is one of my favorite shorts, and when it gets up closer to $150 a share I'll sell longer term calls. At under $120 though, it's got too much potential to shoot up if it catches a bid.

• Sell to Open: 3 FSLR Jun 18 2011 125.0 Call @ $0.11

I'll keep an eye out and see if I find any other quick trades for the week as well. Since I haven't done any screening/tech analysis on possible trades yet though, they'll probably won't be many worth the risk.

The Numbers

• Cash: + $33
• Short Option: -$42
• Margin: -$5100

Expired!

Keep on rolling

Well, we're finally getting some downward pressure in the market. I'm going to roll those CSCO puts again near the close today. The stock price has fallen enough that there isn't much premium in rolling forward one week, so the next series I go with will be the August puts. I should be able to get about $0.40 in credit for the swap. This isn't the way I expected this to play out when I entered the trade, but here we are, so I'll take what I'm given.

• Buy to Close: 2 CSCO June 10 2011 16.0 Puts @ $0.90
• Sell to Open: 2 CSCO Aug 20 2011 16.0 Puts @ $1.30

Rolling out CSCO

As I mentioned on Friday, I was looking at rolling over the naked weekly puts if they were going to finish in the money. I ended up rolling them up one week for a net credit of $0.17.

• Buy to Close: 2 CSCO June 03 2011 16.0 Put @ $0.02
• Sell to Open: 2 CSCO June 10 2011 16.0 Put @ $0.19

That brings the total premium we've collected on the CSCO weekly puts to $0.24. That comes to about a 1.5% return on the stock price or about 3.5% return on margin if the options expire. That's in only a week and a half and brings our break-even price on CSCO to $15.76.

I haven't updated the model portfolio recently, but I will try and do that this afternoon after the market close.

CSCO Update

The market weakness over the last couple days has hit CSCO as well. I currently have some naked CSCO puts at a strike price of 16 that are close to being in the money when they expire at market close today. Rather than get assigned the shares of CSCO, if the puts are in danger of being in the money, I will roll these puts over with the next weekly puts at the same strike.