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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Decided to dump my last bit of money into RIMM again, its yielding 3% return with a 10% break-even point for only 7 days of trades (5 days not including the weekend) – The bad news for RIMM was released last week so chances of another 10% drop in the last 5 trading days are very slim and its just great to pick up 3% return in 5 trading days! For those that don’t know, RIMM make blackberries, so if you have a blackberry & you like it then you should consider buying this stock. I know a lot of the employee from analysts to CEOs etc. in large organisation got one of these little babies! I only see those organisation buying more and more. Obviously with the ‘potential’ slow down in the economy (part of the bad news) we may see sales fall. Its usually the first things people do when times are bad… cut all the unnecessary! (consumables – stuff retail shop sells, entertainment, widgets, gadgets etc.)

PS: Listen closely to news on credit crunch, its a crazy time out there! billions of dollars are being written off and billions of dollars are being pumped back into the money supply by central banks and other banks in the world to increase ‘liquidity’ in the market. i.e. make sure there is enough money for banks & other financial institution to hold their minimum capital and operate their business (fund lending etc)… Just remember everybody, end of the day the consumer/public always pays!

The Trade – 14/12/2007
RIMM
Options/Contract = 100
Buy 100 RIMM @ $107.05
Sell 1 RIMM $100.00 Call @ $10.10
Time Value: $3.05
Intrinsic Value: $7.05

Breakeven Point: $96.95
Assigned Return: 3.05% ($3.05/$100.00)
Unassigned Return: 10.1% ($10.10/$100.00)

I’ve been talking about google.com to many people saying what a wonderful company it is and that it is a good investment. I’ve decided to put my money where my mouth is and buy the damn thing… so here it is…

Why do I think GOOG is such a great company?
Check out google’s financials!! its awesome (especially with all the credit crunch worries… google like many other tech companies don’t borrow money! – i.e. no credit crunch problems) – Google’s Financials

The Trade – 4/12/2007
GOOG
Options/Contract = 100
Buy 100 QOOG @ $688.90 ($68,890.00)
Sell 1 QOOG $690.00 Call @ $22.60 ($2,260.00)
Time Value: $22.60
Intrinsic Value: $0.00

Breakeven Point: $666.30
Assigned Return: 3.43% ($23.70/$690.00)
Unassigned Return: 3.28% ($22.60/$690.00)

Been a bit lazy to make these post, but here they are!
My 4 positions from last month didn’t get exercised – Click Here for details
So I still have NVDA, AAPL, RIMM, AMZN

This is a no brainer one… since i still have the stock all I need to do is ‘lease/rent’ them out again to collect premium!

These are the combined adjusted returns for NVDA, AAPL, RIMM, AMZN over a two month period – new contracts were traded 19/11/2007
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Rolled my position down from $37.5 to $35 and received another $0.90 per stock. Most probably a break-even trade after interest if I get assigned/exercised for this. Not bad for picking the wrong stock. Is as if I never traded it. Obviously there is an opportunity cost, i.e. I could have put this money to more productive use on a winning trade… I can’t complain

The Trade – 22/10/2007
NVDA
Options/Contract = 100
Buy 100 NVDA @ $38.66
Sell 1 NVDA $35.00 Call @ $3.90
Time Value: $0.24
Intrinsic Value: $3.66

Breakeven Point: $34.76
Assigned Return: 0.69% ($0.24/$35.00)
Unassigned Return: 11.14% ($3.90/$35.00)

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Rolled my position down from $170 to $165 and received another $11.5 per stock. Still pretty damn good returns for 2 months

The Trade – 22/10/2007
AAPL
Options/Contract = 100
Buy 100 AAPL @ $174.42
Sell 1 AAPL $165.00 Call @ $23.92
Time Value: $14.50
Intrinsic Value: $9.42

Breakeven Point: $150.50
Assigned Return: 8.79% ($14.50/$165.00)
Unassigned Return: 14.5% ($23.92/$165.00)

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Rolled my position down from $110 to $103.375 and received another $11.55 per stock. Still pretty damn good returns for 2 months

The Trade – 22/10/2007
RIMM
Options/Contract = 100
Buy 100 RIMM @ $114.13
Sell 1 RIMM $103.38 Call @ $20.61
Time Value: $9.86
Intrinsic Value: $10.76

Breakeven Point: $93.52
Assigned Return: 9.53% ($9.86/$103.38)
Unassigned Return: 19.94% ($20.61/$103.38)

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Rolled my position down from $90 to $80 and received another $3.3 per stock. Small loss if I get assigned/exercise on this one. Not bad for a stock that went the wrong way

The Trade – 22/10/2007
AMZN
Options/Contract = 100
Buy 100 AMZN @ $90.52
Sell 1 AMZN $80.00 Call @ $10.05
Time Value: -$0.47
Intrinsic Value: $10.52

Breakeven Point: $80.47
Assigned Return: -0.59% (-$0.47/$80.00)
Unassigned Return: 12.56% ($10.05/$80.00)

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Below are some of the new positions i’ve opened for December Expiry.
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The Trade – 20/11/2007
QQQQ
Options/Contract = 100
Buy 100 QQQQ @ $50.38
Sell 1 QQQQ $50.00 Call @ $1.88
Time Value: $1.50
Intrinsic Value: $0.38

Breakeven Point: $48.50
Assigned Return: 3% ($1.50/$50.00)
Unassigned Return: 3.76% ($1.88/$50.00)

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The Trade – 20/11/2007
PCU
Options/Contract = 100
Buy 100 PCU @ $104.01
Sell 1 PCU $100.00 Call @ $9.61
Time Value: $5.60
Intrinsic Value: $4.01

Breakeven Point: $94.40
Assigned Return: 5.6% ($5.60/$100.00)
Unassigned Return: 9.61% ($9.61/$100.00)

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The Trade – 23/11/2007
WFT
Options/Contract = 100
Buy 100 WFT @ $61.93
Sell 1 WFT $60.00 Call @ $4.05
Time Value: $2.12
Intrinsic Value: $1.93

Breakeven Point: $57.88
Assigned Return: 3.53% ($2.12/$60.00)
Unassigned Return: 6.75% ($4.05/$60.00)

Very volatile month this month and none of my positioned were assigned/exercised… ie. i still have all my stocks!
As you can see AAPL and RIMM are doing fine… NVDA and AMZN are doing not so fine, but the premiums for December should more than cover the deficit!
Anyways… market is just opening as I am finishing up this post, I will need to “re-lease” my stocks out… and maybe open a few new positions.

The Trade – 16/11/2007
NVDA
Options/Contract = 100
Trade Opened – 22/10/2007
Buy 100 NVDA @ $38.66 ($3,866.00)
Sell 1 NVDA $37.50 Call @ $3.00 ($300.00)

I was not exercised/assigned (16/11/2007)

Premium Received: $300.00 (8.41%)
Unrealised Profit/Loss: -$621.00 (-17.41%)
Net Unrealised Profit/Loss: -$321.00 (-9%)

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The Trade – 16/11/2007
AAPL
Options/Contract = 100
Trade Opened – 22/10/2007
Buy 100 AAPL @ $174.42 ($17,442.00)
Sell 1 AAPL $170.00 Call @ $12.42 ($1,242.00)

I was not exercised/assigned (16/11/2007)

Premium Received: $1,242.00 (7.67%)
Unrealised Profit/Loss: -$803.00 (-4.96%)
Net Unrealised Profit/Loss: $439.00 (2.71%)

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The Trade – 16/11/2007
RIMM
Options/Contract = 100
Trade Opened – 22/10/2007
Buy 100 RIMM @ $114.13 ($11,413.00)
Sell 1 RIMM $110.00 Call @ $9.06 ($906.00)

I was not exercised/assigned (16/11/2007)

Premium Received: $906.00 (8.62%)
Unrealised Profit/Loss: -$656.00 (-6.24%)
Net Unrealised Profit/Loss: $250.00 (2.38%)

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The Trade – 16/11/2007
AMZN
Options/Contract = 100
Trade Opened – 22/10/2007
Buy 100 AMZN @ $90.52 ($9,052.00)
Sell 1 AMZN $90.00 Call @ $6.75 ($675.00)

I was not exercised/assigned (16/11/2007)

Premium Received: $675.00 (8.06%)
Unrealised Profit/Loss: -$1,192.00 (-14.23%)
Net Unrealised Profit/Loss: -$517.00 (-6.17%)

These are the 4 trades I opened on Monday 22nd October 2007. Took me about 30mins to find and execute these trades, not exactly my best efforts as I was in a rush and only chasing high returns. I only used the screener function on optionsXpress screening for the highest static returns. From there I look for stock codes that I recognised and then looked at the graphs to look for support and resistance.

Here are my stock options trading for November 2007 contracts. If all my positions get assigned/exercised then I am looking to return about 5% (10% margined) in a 30 day period. This equates to 60% (120%) per year, not taking compounding into consideration. Most of my positions that I opened for November are “at the money” hence the higher returns.

The Trade – 22/10/2007
NVDA
Options/Contract = 100
Buy 100 NVDA @ $38.66
Sell 1 NVDA $37.50 Call @ $3.00
Time Value: $1.84
Intrinsic Value: $1.16

Breakeven Point: $35.66
Assigned Return: 4.91% ($1.84/$37.50)
Unassigned Return: 8% ($3.00/$37.50)

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AAPL
Options/Contract = 100
Buy 100 AAPL @ $174.42
Sell 1 AAPL $170.00 Call @ $12.42
Time Value: $8.00
Intrinsic Value: $4.42

Breakeven Point: $162.00
Assigned Return: 4.71% ($8.00/$170.00)
Unassigned Return: 7.31% ($12.42/$170.00)

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RIMM
Options/Contract = 100
Buy 100 RIMM @ $114.13
Sell 1 RIMM $110.00 Call @ $9.06
Time Value: $4.93
Intrinsic Value: $4.13

Breakeven Point: $105.07
Assigned Return: 4.48% ($4.93/$110.00)
Unassigned Return: 8.24% ($9.06/$110.00)

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AMZN
Options/Contract = 100
Buy 100 AMZN @ $90.52
Sell 1 AMZN $90.00 Call @ $6.75
Time Value: $6.23
Intrinsic Value: $0.52

Breakeven Point: $83.77
Assigned Return: 6.92% ($6.23/$90.00)
Unassigned Return: 7.5% ($6.75/$90.00)

Hi Everybody, its been a while since a done a complete post. On the 19th October 2007 US Stock Options expired. All my positions were assigned, I didn’t have to to check my position and roll them but it doesn’t matter cause I still made money. On average I made about 3-4% return (6-8% margined) over a 30 day period. If you annualise this it would mean I am making 72% – 96% a year. (that’s without compounding) Its crazy how little risk i’m actually taking to generate this sort of cashflow from the simplest stock options trading strategy

Better not count the chickens before they hatch. Anyways i made enough to from this round of stock options trading to cover my trip to Bali & Malaysia for the EBS seminar and connect up with the XL Life Members in Malaysia etc.

The Trade – 25/9/2007
AMD
Options/Contract = 100
Buy 100 AMD @ $13.50
Sell 1 AMD $13.00 Call @ $0.91
Time Value: $0.41
Intrinsic Value: $0.50

Breakeven Point: $12.59
Assigned Return: 3.15% ($0.41/$13.00)

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NVDA
Options/Contract = 100
Buy 100 NVDA @ $35.85
Sell 1 NVDA $35.00 Call @ $2.24
Time Value: $1.39
Intrinsic Value: $0.85

Breakeven Point: $33.61
Assigned Return: 3.97% ($1.39/$35.00)

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GM
Options/Contract = 100
Buy 100 GM @ $35.06
Sell 1 GM $32.50 Call @ $3.87
Time Value: $1.31
Intrinsic Value: $2.56

Breakeven Point: $31.19
Assigned Return: 4.03% ($1.31/$32.50)

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NOK
Options/Contract = 100
Buy 100 NOK @ $36.74
Sell 1 NOK $35.00 Call @ $2.66
Time Value: $0.92
Intrinsic Value: $1.74

Breakeven Point: $34.08
Assigned Return: 2.63% ($0.92/$35.00)

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