SepWk4 - GLD instead of SPY

SepWk4 - GLD instead of SPY

I had wanted to sell a trade on the SPY, given that the markets were pretty conducive for a SPY trade. The charts above showed great promise, but somehow, it didn't really work out for me this week. And so..

I sold a trade on GLD call spread, $130.5/131.5 for a premium of $0.05 and it expired worthless on Friday giving me a real return on investment of 2.95%.

It's not much, but it was more than what I had expected and is expecting these days when it comes to options investing. I am prudent, and my goal and intention is to make back the money that I had lost.

SepWK2 - SPY Market Summary

SepWk2 - SPY Market Summary

The good thing about weekly options is that you don't need to be an expert and yet you can make pretty decent premium income if you manage your trades well enough. I am not kidding. I have been doing this weekly options thing since 2011, and admittedly if I do it well and safe enough, I can make decent income from this.

My biggest problem is probably psychology. I am greedy, fearful and impatient. That has been my downfall. Ignoring the rules that I set up for myself is my second biggest problem.

But imagine the potential if I am able to restrain myself and control my psychology, wouldn't that be powerful.

Alright, enough about my journey. Let's take a look at the SPY market movement yesterday and in a wider sense, the week past. Trading has been choppy with market moving sideways. Not too bad as you can see above that price has been testing the support given by the cloud (kumo) and that has proven to be a strong support for price.

Subsequently price has moved upwards as sellers got tired, and the bulls came in. Current price has risen above the Tenkan Sen and the Kijun Sen trend lines, so that is a bullish sign. The Tenkan Sen and Kijun Sen is about to have a crossover, so that's a reversal signal that prices are going up. Price has broken through the upper resistance of the cloud and that just means bullish as well. It is also good to note that the Chikou Span is also about to intersect historical price, that just means more upside to the SPY. :)

That said, I sold a Call Spread for the SPY for $171/172 for a premium of $0.05. Option expired worthless last night (SG Time). Woke up this morning with ROI 2.95%.

Nice.

AugWk5 - SPY Market Summary

AugWk5 - SPY Market Summary

Taking a look at the market close yesterday, all I can say is that the market's performed to the tune nicely. All I can say is that I am happy that my trade expired worthless, the premium collected is safely in the pocket. :)

I sold the SPY Put Spread $161.5/162.5 for the premium of $0.05 and the option expired worthless and I collected an ROI of 2.95%.

Not too bad considering that it was quite a choppy week. As you can see the daily candles are bouncing off the bottom of the Kumo (see chart above), and it has been testing the support. So far so good? Maybe, but I won't be surprised if the markets are going to be ranging for the next week.

Perhaps it is a good thing, or maybe it isn't. Who knows. :)

On another note, I am actually thinking of adopting a strangle strategy for a safer trade. I heard that there are some folks selling naked calls and puts but into the longer expiration cycles. Maybe that might be something to consider?

The SPY's performance on Friday 30 August 2013 was exactly what it was - uneventful. Except for that dip at about 1.15pm (US time), and the dip again at market closing 3.45pm (US time). But all said and done my contingent on price is intact, and I went to bed not bothering about it. :)

I am using Yahoo Finance's SPY interactive chart (it rocks!) and using the "mountain" setting to trace the movements with a combination of bollinger bands and parabolic SAR (Stop And Reverse). I think these indicators are fabulous. They really help me understand the markets a little better. Of course if Yahoo Finance is able to include the Ichimoku Kinko Hyo indicator in their charts, then that would be pretty fine as well. :)

It kind of looks cluttered with all the drawings and all, but if you know how each indicator is suppose to behave, then it would all make sense. Just that without the ichimoku's support and resistance lines, it might be hard to see where price is going. Oh well. :) 

I made money this week, and I am happy.