July Report.

Starting the second half of 2012 we had an excellent cash flow month in July.   We were blessed to hit the jackpot in timing as the European troubles popped up again on the exact day we starting trading and with the nice downward movement in stock prices we caught some excellent option premiums.  All but one trade was made on one day this month, quite unusual. 

Only 8 positions were sold in July, but as noted the above higher than normal premiums allowed us to make larger than normal cash flow trades. ERF and LO were traded with some of the best options premiums ever.  Add in another four digit trade premium for O as well.  The best part of these trades is the lower price points for the trades mean they have a very good chance of expiring with no assignments. 

We ended the 7 month period with a 6.44% annualized gain to date. Far below our normal gain expectations, but it is nice to be back above water after a horrible second quarter. We have now exited all losing positions and are totally net positive for the year. Maybe we should be happy since the above gain is still significantly above anything one could get in CD's or US Treasuries.  Of course as we have noted before we are playing with the house's money so any gain is a gain for us. 

Looking towards August we have 10 or maybe 11 positions that will be open.  The difference there is we have left one position open in case there is movement in the market we can take advantage of prior to August expirations.  August trades will also likely be more on the put side which always offer better premiums than calls. Fear always trumps greed when people are deciding with emotions. 

We have one of the long held off balance sheet options in FTR expiring in August as well. Today after market close that company reports earnings and that will likely significantly effect the movement of that security.  Thus that report could make our trade in FTR either positive or negative.  After the report we could consider additional option trades in FTR.  WIN reports August 9th and will likely trade along with FTR and a option position could open up there a