Thursday, November 20, 2014

Trade Summary: anticipated success and re-entry, plus a new position

My $14 short puts in AVO - Avigilion Inc (security cameras n' stuff) are looking like they will expire worthless tomorrow, as the stock is trading today at $17.80.

So I added a new position of short puts on them with a January expiry.  I hope this position will again expire worthless, although the number of puts is small enough that I would begrudgingly take assignment.

Additionally I added 1 measly short put on IBRK - Interactive Brokers.  It's my brokerage.  Why not own some?  Plus, with their "take no prisoners" approach to dealing with customer margin-calls, they will no doubt generate MORE income during market corrections and market crashes.  So its earnings should be pretty crash-resistant.  This is why I sold an ATM (at-the-money) call in the hopes I would get assigned.

Using an ATM short put with Interactive Brokers is CHEAPER than just buying the stock outright.  Here's the breakdown:

Sell the short put and collect the premium.  Take the assignment (a $0 cost at IBKR) and hold the stock.  I plan on holding this one forever.  Hopefully one day I'll have enough shares of IBKR so the dividends will pay for all the trading fees I spend each month.  (Looks like I'll need about 2000 shares)  But right now, that would be "considerably" overweight to have a 54k position.  (Current share price $27)

Here's the brick:

Stay HUNGRY my friends.