My Trading Account Status 8/16/2014

Here are my holdings as of August 16th, 2014:

DescriptionSymbolQuantityDate AcquiredCost BasisMarket Value
TOTAL$16,737.84
AFLAC INCAFL10001/31/14$6,278.95$6,010.00
AFLAC INCAFL8903/27/14$5,540.75$5,348.90
CASH$5,378.94

The Aug 16 $65.00 AFL call has expired. AFL ended this week at $60.10, so none of my shares are called away from me (as expected). I will look into selling a call again on my shares of AFL if the stock price goes up to the $63~$64 dollars range.

Do you notice that my cash balance increased a bit from last week? I said in my last post that I might sell a put. Well, I did. I sold a Aug 16 $50.00 WFC put on Monday with net proceeds of $30.35. WFC closed at $50.21 for the week. The option expired with me pocketing the premium and no WFC shares were put to me.

If you think about it, I earned $30.35 on $5,000 for one week’s time. That’s an annual percentage yield of ($30.35/$5,000) x (365/7) = 31.65%. That’s better then putting the money in a bank. I like WFC and had the share price closed at below $50.00 and shares of WFC were assigned to me, I would still be happy with the result. With a cash balance of $5,378.94, I might sell another put again in the coming week. WFC is definitely a top candidate.

My real bottom line on 8/16/2014: $16,737.84

My Trading Account Status 8/9/2014

Here are my holdings as of August 9th, 2014:

DescriptionSymbolQuantityDate AcquiredCost BasisMarket Value
TOTAL$16,534.48
AFLAC INCAFL10001/31/14$6,278.95$5,919.00
AFLAC INCAFL8903/27/14$5,540.75$5,267.91
AFL Aug 16 2014 65.00 CallAFL Call-107/18/14-32.34-1.00
CASH$5,348.57

Looking at the table, do you notice what has changed from last week?

Earnings for Nelnet was announced this past week and it beat estimates by $0.07.  The stock price rallied soon after this news and it closed at $43.92 on Friday, August 9th, 2014. I sold all 121 shares in my trading account for $43.22 per share with a net proceeds of $5,224.53. My realized gain was $253.74.

With a P/E of around 6.69, I still like the long term prospect of NNI. I do hold shares of NNI in my investment account, but I think this rally is a good time for me to part with my shares in my trading account.

You might say that I sold too early, but given the volatile nature of the stock market this past couple weeks, I am satisfied that I made this trade. Having some cash in my trading account give me more trading options. I might look into selling a put next week. Stay tune.

AFL remained pretty much the same. It closed at $59.19 on Friday. I don’t expect the stock price to go much lower. Again I expect the $65.00 August 16th call to expire without me having to sell my AFL shares.

My real bottom line on 8/9/2014: $16,534.48

My Trading Account Status 8/2/2014

My holdings took a hard hit this past week. Here they are as of August 2nd, 2014:

DescriptionSymbolQuantityDate AcquiredCost BasisMarket Value
TOTAL$16,311.40
AFLAC INCAFL10001/31/14$6,278.95$5,912.00
AFLAC INCAFL8903/27/14$5,540.75$5,261.68
NELNET INC CL ANNI12112/11/13$4,970.79$5,016.66
AFL Aug 16 2014 65.00 CallAFL Call-107/18/14-32.34-3.00
CASH$124.06

If you haven’t heard already, the DJIA fell 317 points on Thursday, July 31st, 2014, and another 69 points on Friday, August 1st, 2014.

AFL closed out for the week at $59.12. Ouch! On my last week’s post I speculated that AFL might hit $64 soon. I was dead wrong! I was right that there would be a big swing in price, but it was a big downward swing.

I do think that AFL will recover somewhat in the next 2 weeks. It will not recover enough to justify a sell. They did announce a quarterly dividend of $0.37 per share payable on 9/21/2014, with an ex-dividend date of 8/18. My plan now is to keep my shares until at least 8/18 to collect the dividend.

On the bright side, I can be sure that the $65.00 Aug 16 call will expire with me pocketing the premium without selling my stocks. It’s still possible that AFL will get back up to $65 in 2 weeks time, but highly improbable.

After the Aug 16 call expires, it will be harder to to sell another $65 call on my 100 shares for a good premium. I will need to keep a close tab on the option chain.

There was no significant change in price for NNI. We will have to see what happens when earnings are announced next week.

My real bottom line on 8/2/2014: $16,311.40

My Trading Account Status 7/26/2014

I didn’t make any trade this past week. Here are the holdings in my trading account as of July 26th, 2014:

DescriptionSymbolQuantityDate AcquiredCost BasisMarket Value
TOTAL$17,132.96
AFLAC INCAFL10001/31/14$6,278.95$6,359.00
AFLAC INCAFL8903/27/14$5,540.75$5,659.51
NELNET INC CL ANNI12112/11/13$4,970.79$5032.39
AFL Aug 16 2014 65.00 CallAFL Call-107/18/14-32.34-42.00
CASH$124.06

AFL is now in the mid $63 range. The price of AFL had been going up ever since I sold a call on AFL (Ugh, Murphy’s Law). So at the beginning of the week, I thought that it might close above $64.00 soon, but the price dropped $0.34 on Friday 7/25 to close at $63.59.

Maybe it will happen next week. Q2 earnings for Aflac with be announced after market hours on 7/29/2014. So, there might be a big swing in price on next Tuesday(7/29) and/or Wednesday(7/30).

There are still three more weeks before my $65 call expires. Can AFL hit $65 in three weeks time? I don’t know, I had strong doubts it would when I sold the call, but with the upward price movement during the past week, I am beginning to think that it might.

As for NNI, Q2 earnings will be announced after market hours on 8/7/2014. So maybe there won’t be any huge movement in price before then.

My real bottom line on 7/26/2014: $17,132.96

My Trading Account Status 7/19/2014

Here are the holdings in my trading account as of July 19th, 2014:

DescriptionSymbolQuantityDate AcquiredCost BasisMarket Value
TOTAL$17,218.66
AFLAC INCAFL10001/31/14$6,278.95$6,371.00
AFLAC INCAFL8903/27/14$5,540.75$5,670.19
NELNET INC CL ANNI12112/11/13$4,970.79$5,107.41
AFL Aug 16 2014 65.00 CallAFL Call-107/18/14-32.34-54.00
CASH$124.06

Finally, I made a trade! No, I didn’t sell or buy any stocks, but on 7/15 I sold one AFL call option contract. It expires on 08/16/2014 and has a strike price of $65.00.

I sold the call for a premium of $0.38 (a share):

1 contract = 100 shares x $0.38 = $38.00
Commission                                              ($5.60)
Fees                                                              ($0.06)
Net Receipt                                $32.34

Notice that my cash balance is now $124.06.

Have you ever had the feeling that once you sell a stock, the stock price will go up? Sure enough, once I sold the call, the price of AFL went up. AFL closed at $62.84 on 7/15, the day I sold the call. The stock price continued to go up the next few days and finally closed at 63.71 on Friday 7/18. Last I check, the premium is $0.54 a share. So I could have made even more from selling the call option had I waited a bit longer. So why did I make this trade? When I sold the call, I really didn’t think the stock price would close above $63.50 any time soon. I came to that conclusion because of the price history of the AFL for the past month and given the events going on around world. Boy, was I wrong!

I still have doubts that AFL would hit $65.00 by 08/16/14. The last time that happened was in March of this year. However, if AFL does hit $65.00, not only am I happy to part with the underlying 100 shares of AFL, I would even sell the my other 89 shares.

My only regret is that I didn’t do this sooner. Had I sold a July 19th $65.00 call a couple weeks ago, I could have made some money and still have my 100 shares of AFL stocks today. Options trading is a tool that I often forget that I have. (It’s a good thing that now I have this blog to remind me of it.)

This also brings up another point. In the future, I should try to buy stocks in multiples of 100. If I have 200 shares of AFL instead of 189 shares, I can write another covered call. Because I can’t write any naked calls with my account, I can’t make use of options trading with the 89 odd shares of AFL that I own.

How about NNI? Can I make use of options trading on NNI? If you check the August 16 option chain for NNI, there is not much trading activity going on. If I do put in a order to sell a call, I am not sure if there is enough interest out there for the trade to be executed.

My real bottom line on 7/19/2014: $17,218.66