This is How I Trade Stock Options (Follow My Actual Trades)

Updated on June 20, 2018
Daniel Mollat profile image

Daniel is a retired business executive who now devotes most of his free time to trading stocks and stock options in the stock market.

A Site to Practice What You've Learned

For those of you who have now acquired sufficient knowledge and understanding about stock options, it is a ripe time to start practicing what you have learned. I’m sure many of you have desired to find a website that offered a service where you could watch how options trades are done on an ongoing basis. Where you could watch how an options trade is initiated, monitored, adjusted (if/when needed) and finally closed.

Well, you’ve found just the place for this!

Here I will post my actual options trades as I do them. But since there are dozens of options trading systems I will confine myself to trading those strategies that are the most common for beginners and those who have escalated their knowledge to slightly higher levels. The options trades I will be posting here are those involving the buying and selling of calls and puts, covered call selling, covered put selling, spread trading (mostly credit spreads) and the all-important process of rolling out options if and when these become necessary.

What Does the Service Cost?

It’s FREE.

I’m doing this to satisfy my passion to teach stock market investors how to use options as a complementary tool to enhance their investment returns. This serves as the final chapter in your learning process after you have gone through reading materials and attended webinars and seminars on options trading

Here you will see actual trades as they happen on a current basis. This will be like looking over my shoulder and watching me make my own options trades.

Option Trading Strategies

Like I said, the option trading systems to be used in the actual trades are the following:

  • Buying calls and puts (mostly calls) as a speculative investment strategy in the stock market. This is a directional strategy for those who bet on a stock going in one direction, either up or down. See my article Simple Options Strategies For Beginners.
  • Covered call trading for those who already own stocks and wish to enhance returns on their stocks and increase cash dividend flow.
  • Covered call trading is also widely used by those who buy stocks for the sole purpose of selling calls against their stocks to generate regular income.

  • Covered puts or what is also called cash secured puts for those who have cash and are looking for better returns than what CDs can offer. It is also a great system to use as a home business to generate steady cash income. See my article “Options Trading is Like Owning a Casino”
  • Option spread trading of mostly credit spreads. This is similar to covered put selling and while it requires less capital it may be a little bit more complex but renders greater profitability. See my article “More Bang From Your Buck”

  • Finally, I will include trades showing the all-important feature of using the roll-out process when an option position is threatened with exercise or assignment.

How Does This Service Work?

Whenever I make an option trade, whether it’s an opening trade, adjusting trade, rolling-out trade or closing trade, I will post the trade transaction here under the heading “Current Options Trades”. Immediately after posting my trade I will also post a comment at the bottom of the article where it says "Comments".

See below under “Current Options Trades” how transactions are reported.

How To Follow My Trades

To follow my trades you must be a member of HubPages.com. Go to the “COMMENTS’’ section below the article and check “Follow this article's comments”. By checking this section you will receive notice every time I post a new trade.

If you are not a HubPages member you must join the site to receive my notices. Sign up here, it’s FREE.

Source

Current Options Trades

Listed below are my current options trades and the dates they were made with notes as to what and why the trade was made. Scroll down to view the most current date and trade transaction.

NOTE: Each trade transaction consists of enough number of contracts to yield anywhere from $400 - $500 in gains or losses after the trade position is closed. In this manner, it will be easier to compare results between trades. You may wish to use a lesser or higher quantity per trade depending on your available capital and risk tolerance.

Farther down is a summary table of the trades showing gains and losses.

May 4, 2018 – Sold to open (sto) IP June 50 put option @ $0.84

May 4, 2018 – Sold to open (sto) WBA June 60 put option @ 0.79

I made two trades today; International Paper (IP) and Walgreens Boots Alliance (WBA). Both are covered puts or what is also called cash-secured puts. These two trades resulted in cash intakes into my broker account.

May 7, 2018 – Bought to open (bto) FB June 180 call at 4.13. I placed a stop loss on this trade at 2.05.

I bought the Facebook (FB) June call as a speculative play. I’m betting this stock is ready to rise in a short time and if it does before the June expiration I could stand to make a bit of profit. Of course, it goes without saying, I lose my bet if I’m stopped out at 2.05.

May 10, 2018 - Sold to close (sbc) FB June 180 call at 8.35 for a profit of 102%! Not a bad return for an investment of only three days.

May 10, 2018 - Bought to open (bto) Alibaba (BABA) June 200 call at $5.25. At the same time I placed a stop loss order (stc) at 2.70. This again is a speculative trade just like Facebook in the hope that it will tick up in the next few days. Hopefully well before expiration date on June 15.

May 14/2018 – Today I did a debit spread trade. A covered call transaction on International Paper (IP) where I bought the stock and simultaneously sold a call option against the stock. But Instead of putting in two orders, buying the stock and selling the option, I placed a covered call order as one transaction for a net debit of $53.32. Below is a snap shot of the trade ticket placed with my broker:

When I placed the order IP was trading at around $54.09 and the June 55 call option (expiring Jun 15) was trading at $0.75-0.80.

The order was filled at the net debit price I specified of $53.32. This translated to my having bought the IP stock at 54.10 and sold the June 55 call at 0.78.

Although the order was place as one transaction for a net debit, the broker’s online statement shows the order being filled as two transactions; the stock bought at $54.10 and the June 55 call option as sold at $0.78.

May 15/2018 - Placed another covered put trade today. Sold to open the Walmart (WMT) June 82.5 put at 1.83 (expiring on June 15)

May 21 – Bought to open Home Depot (HD) July 195 call at $2.615

May 23 – Did two closing trades today when my stop losses were triggered. Sold to close the BABA June 200 call at $2.41, and sold to close the HD July 195 call at $1.50. Please see summary table below.

NOTE: My website was down for a few days while undergoing a fix to a problem. I apologize that I was not able to report the HD trade on the same day but it turned out to be a blessing in disguise for you because I had to close it today at a loss.

May 23, 2018 - Made a new opening trade today. Bought to open Nvidia Corporation (NVDA) June 250 call at $5.25

May 24, 2018 - Sold to open Bank of America June 30 put @ $0.51. This is a covered put expiring in June. If you have a margin account with your broker, which more often than not is the case, the cash you need to cover this transaction is about $550-600 per contract depending on your broker's internal margin policies. Some brokers are more liberal than others. My broker's requirement for this trade is $578 which gives me a return on investment of 8.4% in one month (.49 x 100 ÷ 578). The same manner of calculating returns applies to the sold puts of May 4th.

May 29, 2018 - Today, with the market taking a big drop, my BAC June 30 puts have gone ITM placing the position in danger of being assigned. If I allowed assignment I would have to buy the stock at $30 and my net cost after deducting the puts I sold would be $29.49. BACs current price now is $29.06 which is lower than my net cost. I decided to do a roll-out by buying to close the June 30 puts at $1.28 and selling to open new puts three months away in September. Here is the trade I did today:

Buy-to-close (BTC) June 30 put @ 1.28; sell-to-open (STO) Sept 29 put @ 1.48 for a net credit of $0.20

The two trades were placed as one transaction for a net credit of $0.20 or $200 for the 10 contracts in this position. Take note I've also reduced the strike price from $30 to $29. See trade summary below.

June 1, 2018 - Today I sold to close (STC) the NVDA June 250 calls at $9.19 for a profit of 75%. See details in Trade Summary.

June 5/18 - New opening trade today. Buy to open Facebook (FB) Jul 200 call (expiry 7/20/18) at any price below $3.50. I was filled at $3.05. See details in Summary Table.

June 6 /18 – My covered calls options on IP were exercised. I had to give up (sold) my IP shares at the strike price of $55 thus yielding a profit of $$0.90 per share or a total of $450 for the 500 shares I held. Adding the proceeds from the sale of the calls makes a total of $840. Additionally, a cash dividend of $0.475 per share was paid in May totaling $237.50. All told, this investment in IP stock and options has returned a total of $1,077.50. The return on investment is a nice 4% for a position that was held less than one month. If margin was used in the purchase of the shares (50%), as is usually the case, the ROI is 8%. See Trades Summary below.

June 7/18 - New trade today. Sold to open ATT (T) Jul 32 put @ $0.49. This is a covered put position (cash secured put), one of my favorite options strategies. See Trades Summary.

June 11/18 - My June 60 puts on Walgreens-Boots (WBA) are expiring this coming Friday. I am opening a new covered put position (cash secured puts) by selling 4 contracts of the July 62.5 puts at $1.25 and was filled at this price when the underlying WBA stock was at $64.06. See Trades Summary below.

June 14/18 - Three of my put options are expiring tomorrow for total gains of $1,527. I opened a new position today as follows:

Sold 4 contracts Schlumberger Ltd (SLB) July 67.5 put at $1.55. See transaction in Trades Summary below.

June 16, 2018 – Yesterday was expiration day for regular June stock options. I had three remaining options that all expired without value thus adding gains to my running total to-date.

Since starting this site on May 4, 2018, I’ve achieved total gains of $2,143.50. See Trades Summary for results.

June 20/18 - Today I sold to close the Facebook (FB) July 200 calls at $6.05 for a nice profit of 100%. See Trades Summary.

June 20/18 - Opened a new trade using covered put option strategy. STO 4 contracts of Consolidated Edison (ED) July 75 put @ 1.30.

Trades Summary (scroll right to see more columns)

(1) Option Name/Expiration
(2) Action
(3) stock or option
(4) Entry Date
(5) Option or Stock Price
(6) Contracts or shares
(7) Opening Value
(8) x
(9) Action
(10) Exit Date
(11) Option or Stock Price
(12) Closing Value
(13) Gain/Loss
IP Jun 50 put (International Paper)
sto
o
5/4/2018
0.84
6
504.00
x
btc
6/15/2018
0.00
0
504.00
WBA Jun 60 put (Wallgrn Boots Alince)
sto
o
5/4/2018
0.79
6
474.00
x
btc
6/15/2018
0.00
0
474.00
FB Jun 180 call (Facebook)
bto
o
5/7/2018
4.13
1
-413.00
x
stc
5/10/2018
8.35
835
422.00
BABA Jun 200 call
bto
o
5/10/2018
5.25
1
-525.00
x
stc
5/23/2018
2.41
241
-284.00
IP (International Paper) covered call
bto
s
5/14/2018
54.10
500
-27,050.00
x
stc
6/5/2018
55.00
27,500
450.00
IP Jun 55 call (Int'l Paper)
sto
o
5/14/2018
0.78
5
390.00
x
btc
6/5/2018
0.00
0
390.00
IP dividend paid on 5/25/18
 
 
5/25/2018
0.475
500
237.50
 
 
5/25/2018
0.00
0
237.50
WMT Jun 82.5 put
sto
o
5/15/2018
1.83
3
549.00
x
btc
6/15/2018
0.00
0
549.00
HD Jul 195 call
bto
o
5/21/2018
2.615
2
-523.00
x
stc
5/23/2018
1.50
300
-223.00
NVDA Jun 250 call
bto
o
5/23/2018
5.25
1
-525.00
x
stc
6/1/2018
9.19
919
394.00
BAC Jun 30 put
sto
o
5/24/2018
0.51
10
510.00
x
btc
5/29/2018
1.28
-1,280
-770.00
BAC Sept 29 put
sto
o
5/29/2018
1.48
10
1,480.00
x
 
open
 
 
0.00
FB Jul 200 call
bto
o
6/5/2018
3.05
2
-610.00
x
stc
6/20/2018
6.05
1,210
600.00
T Jul 32 put
sto
o
6/7/2018
0.49
10
490.00
x
 
open
 
 
0.00
WBA July 62.5 put (Walgrn-Boots)
sto
o
6/11/2018
1.25
4
500.00
x
 
open
 
 
0.00
SLB Jul 67.50 put
sto
o
6/14/2018
1.55
4
620.00
x
 
open
 
 
0.00
ED Jul 75 put
sto
o
6/20/2018
1.30
4
520.00
x
 
open
 
 
0.00
Total Gain/Loss to-date
$2,743.50
 
 
 
 
 
 
 
 
 
 
 

NOTES:

The table is divided into two sections: The left side of the "x" column represents opening trades while the right side represents closing trades and the net Gain or Loss after the trades are closed.

Although I may trade more than one option contract or more than one hundred shares of stock in my transactions (1 option contract = 100 shares) I will only show 1 for options and 100 for stocks in each trade since I don’t know how much capital you are working with.

No commissions or brokers’ fees are included since this is a variable depending on which stock/option broker you work with and the number of contracts or shares you trade.

Column 1: “Option Name/Expiration” shows the symbol of the underlying stock, expiration month, strike price, type of option (call or put) and company name.

Column 2: the action taken: sto – sell to open; bto – buy to open; stc – sell to close; btc – buy to close

Column 3: whether the security is a “s” (stock) or “o” (option)

Column 4: date on which the trade was initiated

Column 5: current price of the stock or option premium on entry date

Column 6: number of option contracts (if trade is option) or number of shares (if trade is stock)

Column 7: total value of the opening trade

Column 8: table divider between opening and closing transactions

Column12: closing value of the trade transaction

Column 13: The net effect (Gain or Loss) of the transaction after the position is closed

Ready, Set, Go!

You are now ready to get on and start your practice trading adventure.

DISCLAIMER

Any and all information pertaining to trading stocks and options including examples using actual securities and price data are strictly for illustrative and educational purposes only and should not be construed as complete, precise or current. The writer is not a stockbroker or financial advisor and as such does not endorse, recommend or solicit to buy or sell securities. Consult the appropriate professional advisor for more complete and current information.

© 2018 Daniel Mollat

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