{"id":1628,"date":"2020-07-31T16:08:46","date_gmt":"2020-07-31T16:08:46","guid":{"rendered":"http:\/\/tradejolt.com\/wordpress\/?p=1628"},"modified":"2020-07-31T19:21:45","modified_gmt":"2020-07-31T19:21:45","slug":"ge-a-new-financial-cow-for-our-growing-herd","status":"publish","type":"post","link":"https:\/\/tradejolt.com\/wordpress\/ge-a-new-financial-cow-for-our-growing-herd\/","title":{"rendered":"GE – A New Financial Cow for Our Growing Herd"},"content":{"rendered":"

Well, our milk-the-cow strategy has been going strong this year, after developing the strategy and working out the kinks in paper-based and live trading over the last 3 years. So we've decided to add a new cow to our growing herd, namely General Electric (GE).<\/p>\n

\"\"<\/a>
GE 31 July graph<\/figcaption><\/figure>\n

For my smaller investors, I needed to find a stock that did not require a lot of margin, that offered an attractive rate of retail\/wholesale options cost, that offered high frequency of options contracts (weeklies, preferably), and equally important, that offered low bid\/ask spreads. These are all criteria for choosing a good candidate to generate maximum income from a strategy based on rolling options.<\/p>\n

At around $6.00 a share, I could establish a long term strangle (buying out of the money puts and calls) for $4.10 per share or $410 per contract.
\nThis puts an outer limit at possible losses if I am careful not to lose money on my frequent option rolls (milking my cow). <\/p>\n

I sold my first at the money puts and calls on the same day at a 6.00 strike. Later that day I had to buy them back at a loss to reset the straddle to $6.50. I did so by rolling from the original July 31 sold strikes to Aug 7 sold strikes. This created a $9.50 loss per contract but a positive cash flow of $15.41.<\/p>\n

As I'm writing this, on the next day, the stock has not moved much, but the options positions have turned profitable. The currently have a positive value of $209 if I were to close them. <\/p>\n

size: 41 contracts
\nLong Term Hedge: $4,510 or $1.10 per share
\nCash Flow to Date: $650 or $0.07 per share
\nP&L to date : ($95) or ($0.02) per share<\/p>\n","protected":false},"excerpt":{"rendered":"

Well, our milk-the-cow strategy has been going strong this year, after developing the strategy and working out the kinks in paper-based and live trading over the last 3 years. So we’ve decided to add a new cow to our growing herd, namely General Electric (GE). For my smaller investors, I needed to find a stock […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_bbp_topic_count":0,"_bbp_reply_count":0,"_bbp_total_topic_count":0,"_bbp_total_reply_count":0,"_bbp_voice_count":0,"_bbp_anonymous_reply_count":0,"_bbp_topic_count_hidden":0,"_bbp_reply_count_hidden":0,"_bbp_forum_subforum_count":0,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[5],"tags":[],"class_list":["post-1628","post","type-post","status-publish","format-standard","hentry","category-trades"],"_links":{"self":[{"href":"https:\/\/tradejolt.com\/wordpress\/wp-json\/wp\/v2\/posts\/1628","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tradejolt.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tradejolt.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tradejolt.com\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/tradejolt.com\/wordpress\/wp-json\/wp\/v2\/comments?post=1628"}],"version-history":[{"count":4,"href":"https:\/\/tradejolt.com\/wordpress\/wp-json\/wp\/v2\/posts\/1628\/revisions"}],"predecessor-version":[{"id":1633,"href":"https:\/\/tradejolt.com\/wordpress\/wp-json\/wp\/v2\/posts\/1628\/revisions\/1633"}],"wp:attachment":[{"href":"https:\/\/tradejolt.com\/wordpress\/wp-json\/wp\/v2\/media?parent=1628"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tradejolt.com\/wordpress\/wp-json\/wp\/v2\/categories?post=1628"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tradejolt.com\/wordpress\/wp-json\/wp\/v2\/tags?post=1628"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}