Yong-Long Lai

I don’t know why, but I have a thing with money not being used/utilised, so decided to dump the last bit of the spare capital into AMZN. The market has pulled back quite strongly yesterday night, but for some reason majority of my portfolio was not affected (which is great) I guess good stocks don’t drop that much.

I love tech stocks, definitely the way of the future! especially after the ‘tech burst’ only the good ‘tech’ companies are left. Also the companies that you would trust to do anything with. e.g. amazon.com, ebay.com, google.com etc. and also not to forget companies such as nvidia, microsoft, research in motion, apple etc. Great companies, great management, great balance sheet and great income statement. I think I need to start my own little business and try to mimic characteristic of these great company’s financial statements…

This is pretty much my 2 days of work for the month, now all I do is wait till the 18th Jan 2008 before I ‘work’ again… and collect more money.

I’ve been studying and I remember hearing something like this, “… if you can figure out how your goals can be achieve, then its too easy…” i.e. I need something more challenging ’cause it definitely feels like this is too easy and i’m just waiting for time to pass so I can collect… stick around and see what cool stuff I decide to venture into…

Anyways, Happy New Year!

The Trade – 27/12/2007
AMZN
Options/Contract = 100
Buy 200 AMZN @ $94.29 ($18,858.00)
Sell 2 AMZN $95.00 Call @ $3.50 ($700.00)
Time Value: $3.50
Intrinsic Value: $0.00

Breakeven Point: $90.79
Assigned Return: 4.43% ($4.21/$95.00)
Unassigned Return: 3.68% ($3.50/$95.00)

Hi All,

January is a short month, only has 25 days to expiry (which includes Christmas and New Year holiday effectively making this into a 15 trading day month) The premiums are not as high as I would like but I guess that’s because everybody is not looking at the screen (i.e. on holidays, lower volatility)

Anyways, here are my trades I placed yesterday (this morning)

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Uptrend for the past month so has plenty of support at the $30 level. INTC had a good earning report which will give NVDA a boost and also their recent earning report was favourable. (Especially for the next 25 days) Technically speaking, NVDA has broken its resistance line of $35.47 which is give it good momentum in the new year.

The Trade – 24/12/2007
NVDA
Options/Contract = 100
Buy 100 NVDA @ $35.68
Sell 1 NVDA $35.00 Call @ $1.97
Time Value: $1.29
Intrinsic Value: $0.68

Breakeven Point: $33.71
Assigned Return: 3.67% ($1.29/$35.00)
Unassigned Return: 5.62% ($1.97/$35.00)

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Had to do this one because with a 6.13% buffer it would mean that I am below the support line for the past 4 months (i.e. its technically sound) I also checked out the fundamentals, its actually quite a good company, slightly low profit margins but apart from that, everything is pretty good for Tiffany & Co.

The Trade – 24/12/2007
TIF
Options/Contract = 100
Buy 100 TIF @ $46.31
Sell 1 TIF $45.00 Call @ $2.76
Time Value: $1.45
Intrinsic Value: $1.31

Breakeven Point: $43.55
Assigned Return: 3.22% ($1.45/$45.00)
Unassigned Return: 6.13% ($2.76/$45.00)

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The Trade – 24/12/2007
MA
Options/Contract = 100
Buy 100 MA @ $212.69
Sell 1 MA $210.00 Call @ $11.11
Time Value: $8.42
Intrinsic Value: $2.69

Breakeven Point: $201.58
Assigned Return: 4.01% ($8.42/$210.00)
Unassigned Return: 5.29% ($11.11/$210.00)

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This is an insane company, AAPL has broken its resistance and is at its all time high. Fundamentally and Technically this is a good stock, especially for long term portfolio.

The Trade – 24/12/2007
AAPL
Options/Contract = 100
Buy 100 AAPL @ $197.12
Sell 1 AAPL $195.00 Call @ $10.73
Time Value: $8.61
Intrinsic Value: $2.12

Breakeven Point: $186.39
Assigned Return: 4.42% ($8.61/$195.00)
Unassigned Return: 5.5% ($10.73/$195.00)

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This is equivalent to the Google of China. biadu.com is a ‘rip-off’ of google and has been very successful. If they keep doing whatever it is that they are doing, they will one day become like google and compete in the same space. Right now they rule the China internet space. Like google, biadu doesn’t borrow money which helps during this credit crunch crisis.

The Trade – 24/12/2007
BIDU
Options/Contract = 100
Buy 100 BIDU @ $382.19
Sell 1 BIDU $380.00 Call @ $24.99
Time Value: $22.80
Intrinsic Value: $2.19

Breakeven Point: $357.20
Assigned Return: 6% ($22.80/$380.00)
Unassigned Return: 6.58% ($24.99/$380.00)

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With recent earning announcement last week, RIMM should be going to be a good performer in 2008. Good amount of volatility means good premium.

The Trade – 24/12/2007
RIMM
Options/Contract = 100
Buy 100 RIMM @ $118.88
Sell 1 RIMM $115.00 Call @ $8.51
Time Value: $4.63
Intrinsic Value: $3.88

Breakeven Point: $110.37
Assigned Return: 4.03% ($4.63/$115.00)
Unassigned Return: 7.4% ($8.51/$115.00)

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Have a safe and wonderful Christmas day!

As expected all my positioned got exercised, i.e. I made my premiums! (which is all I want… this is not a capital growth strategy, its purely a cashflow strategy)
Buy some shares, write lease agreement, collect rent, repeat every month.

Some of these trades are from previous month (October) which didn’t get assigned, so I wrote the call options again to pick up some premiums! No harm collecting more money. You can see my old position from November here

All in all this was a great month, closed off October trades now I’m all cashed up to re-enter the market tonight. I’ll be re-entering mostly the same stocks, will check out the stock screener from moneycentral to see if the list has changed. If you have no idea what i’m talking about but you are interested go read this free ebook: What I Didn’t Learn At School But Wish I Had. If you’ve already done that and still have no idea what to do then look into this: Mastery of Stock Market Intelligence

Anyways, Merry Christmas & a Happy New Year!

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From October – breakeven trade
The Trade – 21/12/2007
NVDA
Options/Contract = 100
Trade Opened – 22/10/2007
Buy 100 NVDA @ $38.66 ($3,866.00)
Sell 1 NVDA $35.00 Call @ $3.90 ($390.00)

I was exercised/assigned (21/12/2007)
Sell 100 NVDA @ $35.00 ($3,500.00)

Net Profit: $24.00
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From October
The Trade – 21/12/2007
AAPL
Options/Contract = 100
Trade Opened – 22/10/2007
Buy 100 AAPL @ $174.42 ($17,442.00)
Sell 1 AAPL $165.00 Call @ $23.92 ($2,392.00)

I was exercised/assigned (16/11/2007)
Sell 100 AAPL @ $165.00 ($16,500.00)

Net Profit: $1,450.00
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From October
The Trade – 21/12/2007
RIMM
Options/Contract = 100
Trade Opened – 22/10/2007
Buy 100 RIMM @ $114.13 ($11,413.00)
Sell 1 RIMM $103.38 Call @ $20.61 ($2,061.00)

I was exercised/assigned (16/11/2007)
Sell 100 RIMM @ $103.38 ($10,337.50)

Net Profit: $985.50
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From October – small loss trade
The Trade – 21/12/2007
AMZN
Options/Contract = 100
Trade Opened – 22/10/2007
Buy 100 AMZN @ $90.52 ($9,052.00)
Sell 1 AMZN $80.00 Call @ $10.05 ($1,005.00)

I was exercised/assigned (16/11/2007)
Sell 100 AMZN @ $80.00 ($8,000.00)

Net Profit: -$47.00
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The Trade – 21/12/2007
QQQQ
Options/Contract = 100
Trade Opened – 20/11/2007
Buy 100 QQQQ @ $50.38 ($5,038.00)
Sell 1 QQQQ $50.00 Call @ $1.88 ($188.00)

I was exercised/assigned (16/11/2007)
Sell 100 QQQQ @ $50.00 ($5,000.00)

Net Profit: $150.00
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The Trade – 21/12/2007
PCU
Options/Contract = 100
Trade Opened – 20/11/2007
Buy 100 PCU @ $104.01 ($10,401.00)
Sell 1 PCU $100.00 Call @ $9.61 ($961.00)

I was exercised/assigned (16/11/2007)
Sell 100 PCU @ $100.00 ($10,000.00)

Net Profit: $560.00
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The Trade – 21/12/2007
WFT
Options/Contract = 100
Trade Opened – 23/11/2007
Buy 100 WFT @ $61.93 ($6,193.00)
Sell 1 WFT $60.00 Call @ $4.05 ($405.00)

I was exercised/assigned (16/11/2007)
Sell 100 WFT @ $60.00 ($6,000.00)

Net Profit: $212.00
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The Trade – 21/12/2007
GOOG
Options/Contract = 100
Trade Opened – 4/12/2007
Buy 100 GOOG @ $688.90 ($68,890.00)
Sell 1 GOOG $690.00 Call @ $22.60 ($2,260.00)

I was exercised/assigned (16/11/2007)
Sell 100 GOOG @ $690.00 ($69,000.00)

Net Profit: $2,370.00
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5 working day trade
The Trade – 21/12/2007
RIMM
Options/Contract = 100
Trade Opened – 14/12/2007
Buy 100 RIMM @ $107.05 ($10,705.00)
Sell 1 RIMM $100.00 Call @ $10.10 ($1,010.00)

I was exercised/assigned (16/11/2007)
Sell 100 RIMM @ $100.00 ($10,000.00)

Net Profit: $305.00
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