Stock Investment » AVAV

Stock Investments :Options Expiration – December 2010

admin — Sat, 25 Dec 2010 11:59:16 +0000

I had a mixed options expiration for December with two of my options expiring while the underlying stock was trading above the strike and the other two finished below the strike. Here are the details:

MDY December 145 naked put – This one finished far out of the money and

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I had a mixed options expiration for December with two of my options expiring while the underlying stock was trading above the strike and the other two finished below the strike. Here are the details:

Along with the four options I had expiring today I had a little surprise hit too. A few days ago I entered a limit order to close my AFL naked put if its value dropped some more. This morning while AFL was trading at .70 it hit and I bought to close one AFL January 50 naked put at $content.30 and paid .01 with commissions. That gave me a realized gain of 1.98 in half the time I originally planned. I didn’t see much benefit in waiting another five weeks to have an additional .00 in profit after the majority of the premium had already melted away. I might sell a new naked put on AFL on Monday once I see what the February options look like, but I’m not sure I want to chase it yet. It might be a better idea to wait for a small dip before jumping back in.

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Stock Investments :Options Expiration – October 2010

admin — Sat, 23 Oct 2010 09:41:54 +0000

I only have a few options expiring today with mixed results. The rest of my portfolio is weighted to November’s expiration. If nothing drastic happens in the next few trading days, I’ll start working towards building up my options for December’s expiration and

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I only have a few options expiring today with mixed results. The rest of my portfolio is weighted to November’s expiration. If nothing drastic happens in the next few trading days, I’ll start working towards building up my options for December’s expiration and move deeper into potential margin, all the while hoping that any correction is swift and causes the VIX (and VXX) to spike. On the other hand, a slow correction will give me time to chase my positions with new option legs. The way I see it (maybe with rose colored glasses) I’m in a good position right now to profit in either direction.

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Stock Investments :Options Expiration – August 2010

admin — Mon, 23 Aug 2010 03:43:30 +0000

Today’s option expiration finished somewhat differently than I thought it was going to as of a week ago. Here’s the breakdown of how it went down:

VXX, two August 24 Puts – I’ll be assigned 200 shares of VXX on Monday morning. Instead of trying to roll

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Today’s option expiration finished somewhat differently than I thought it was going to as of a week ago. Here’s the breakdown of how it went down:

I have a lot of options expiring in September, so any other new options I write in the coming weeks will probably be for October so I can continue to spread out my risk into different expiries.

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Stocks Investments :AVAV Price and Value Charts

admin — Mon, 23 Aug 2010 03:43:30 +0000

I have AVAV covered calls expiring tomorrow and it looks like I’ll be holding onto my shares, i.e. the options are out of the money by more than 6% with one day to go. I’ve been debating what I should do; exit my position now or hold on for one more round of covered calls. [...]

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I have AVAV covered calls expiring tomorrow and it looks like I’ll be holding onto my shares, i.e. the options are out of the money by more than 6% with one day to go. I’ve been debating what I should do; exit my position now or hold on for one more round of covered calls. If I do write covered calls again, should I sell at the .50 or .00 strike? I looked at AVAV’s daily prices for the past six months and see some declining trend lines and a couple of horizontal lines that should act as resistance. The one trend line of higher lows isn’t too far away from AVAV’s current price and could be the line of support AVAV needs to get it moving higher again.

After checking the chart I also looked at Ford Equity Research’s Valuation Bands to see how AVAV was looking from a value perspective. The Ford information is from August 13th and already since then AVAV has gained almost a dollar. The big take away from the second chart is that AVAV is at the bottom of its valuation band. Couple that with the fact that AVAV has a forward P/E lower than its trailing P/E and it looks inviting to just stay long.

My average cost per share is down to .17 including all of the premiums I’ve taken in so far. If I want to increase my chances for a profit and exit I should sell .50 covered calls, but if I want to go for a much bigger gain I should aim for the .00 strike covered calls. I’d like to go with the October expiration calls, but they aren’t posted yet, so I can’t get a jump on the game. The premiums for the September calls make the strike options not worth the trade, but the .50 aren’t so bad. I’d take a .50 loss on the shares, but my average cost would come down low enough to let me exit with about a .00 profit per share.

I started with AVAV four months ago with naked puts. If I sell my shares in October (that’d be six months total) from .50 covered calls I will have made better than a 9% gain in 6 months (aka 18% annualized). That’s hard to resist pocketing that gain on a stock that I made a mistake on based on it being lower priced now than when I started with it. If AVAV continues to slide then I will have made the right move by lowering my cost per share even further. Now that I’ve written all of this I seem to have made up my mind. I just need to wait for the October option contracts to post.

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Stocks Investment :Sold AVAV Covered Calls

admin — Thu, 15 Jul 2010 09:44:26 +0000

I tried to sell my AVAV shares on Monday, but it didn’t make it high enough to hit my limit order so today I changed my plan. I decided to keep the shares and sell covered calls instead. While AVAV was trading at .75 my order finally hit and I sold two AVAV August 25 covered [...]

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I tried to sell my AVAV shares on Monday, but it didn’t make it high enough to hit my limit order so today I changed my plan. I decided to keep the shares and sell covered calls instead. While AVAV was trading at .75 my order finally hit and I sold two AVAV August 25 covered calls for .45 each and received 8.57 after commissions.

AVAV has been drifting lower since mid-May and I think will hold support, but with their earnings release coming up in a couple of days I figured I should go ahead and lock in the premium while it was still high. I did well on the initial premium I received on the naked puts too, so my cost per share is down to .17. That might not be low enough if AVAV disappoints, but I still think this is an easy longer term hold on a dip. If it shoots up higher before August options expiration I’ll have to be happy taking a good gain on a small investment.

Unrelated Note: I don’t know what’s up with my comments’ setting changing every couple of days. Every two or three days I have to turn them back on only to see them all closed a couple of days later. I’ve upgraded my WordPress version in the hopes that if there was a bug or hack in it I’ve fixed it now. If you ever see it closed and want to leave a comment don’t be shy about emailing me. Hopefully it’ll resume its old ways soon of actually letting me make changes when I want rather than when it decides.

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Stocks Investment :Sold AVAV June Naked Puts & Exited T

admin — Wed, 21 Apr 2010 12:14:20 +0000

Barron’s reran a bullish article on AeroVironment, Inc (AVAV) in today’s print edition that they ran last Tuesday online. After the article first came out AVAV got a nice bounce and then settled down by the weekend. I expected it to see a little more upside today

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Barron’s reran a bullish article on AeroVironment, Inc (AVAV) in today’s print edition that they ran last Tuesday online. After the article first came out AVAV got a nice bounce and then settled down by the weekend. I expected it to see a little more upside today after the reprint and that’s what we saw. The story was good enough to gain my interest in AVAV, so I was ready right when the markets opened to make a quick trade.

While AVAV was trading at .36 I sold two AVAV June 25 naked puts at .40 each and received 8.47 after commissions. A few months ago AVAV found a rough spot and dropped from the mid-30s to the lower 20s in the span of just a few days. The .50 area ended being support and AVAV has been working itself higher since then. The Barron’s article just gave it another leg up. I think the downside is limited from here and with .40 in premiums my downside risk is fairly shallow. Although AVAV’s trailing P/E ratio is in the low 50s, the forward P/E ratio is around 22. According to Barron’s they have a huge backlog of orders from the government and (my favorite part) Nissan selected AVAV as one of the suppliers for its new electric car. I’m expecting Nissan’s electric car to be a big seller and bring AVAV along for the quiet ride.

I only sold two contracts as I was making the trade in the first five minutes of the day. I planned to go back in for if it dipped further, but it hasn’t happened yet. Instead AVAV finished the day above .00. I see it at the top of its trading channel, so I’ll leave a limit order in place to hit if it comes back down towards the bottom end of its range. I feel I’m missing something with it for the premiums to be so rich, but haven’t figured out what it is yet. I think there’s a fear left on it after the beating it took a few months ago, but without knowing that for sure I thought it wise to only go with a partial order to start.

I took an option assignment on 300 shares of AT&T (T) as I said I expected on Friday. I had planned to sell covered calls on those long shares, but then T bounced from the start this morning. I decided to reconsider my position and while it was bouncing back and forth over .00 I sold my 300 shares with a limit order at .02 and received ,804.50 after commissions which equaled a .50 profit on the shares. I decided not to extend my time with T after the June options were posted this morning I just didn’t see the return I wanted with the call premiums. Since I was already in on AVAV I knew I was putting my money to use elsewhere and opted to save a little firing power for other, richer premiums.

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