A Millionaires Real Trades

If you want to see how a millionaire trades just watch and I hope that you learn.


Sold 9 puts, AES Dec 20th 5 strike at .20 bringing into my account $180 (gross before Commission) But why sell puts on energy stocks or energy infrastructure stocks when we all know they are going down? when a stock is cheap it is cheap at that's just a fact and I believe that this stock is too low. Because that is pure short term thinking.

Now that we've seen some of the sell off and we'll probably see more, I'm looking long term. Do you think that electricity will be necessary for developing countries to keep up with their demand in the future when things pick back up? I think so and thus they will need new power plants to produce energy for their constantly growing population that wants the middle class lifestyle and I don't see why the Developing countries shouldn't have what they want, it may be a while, but they will get there, to the promised land. On sale at a never again in this century seen price is Symbol AES IMHO, but many of hedge funds still have redemption's to do and this stock may go lower.

I'm going to try and buy 900 shares of AES by selling the DEC 5 strike as the stock may get down there by then. This sell off is going to last a while and I don't want to be put too many stocks too soon, or I'll have to wait too long to recover my money, but given the 52 week high of $23+ and an all time of $68+ with an all time low of $3ish, I think that I'm getting in at the right price. This stock someday will go back up the $50-$100 and when it does I want to be in it.

Sold 3 puts, NYX Dec 20th 15 strike at .37 bringing into my account $111 (gross before Commission) I figured that the New York Stock Exchange isn't going to perish between now and Christmas and therefore a price of $15 for this stock is extremely cheap, but I don't want too many shares of it because its just too hard for me to figure out the fundamentals to the T. Think about it, where does the revenue come from. If it's from trading, well there has been a lot of that, if it's from the value of the seats, I'm sure that they are dropping, but at the end of the day, this it's basically a play on America and Europe getting together to make sure the financial systems do not collapse, if so, this will be a no brainer trade and I'll just keep the premium.

I don't necessarily want the stock on this one because I do believe that the physical markets will eventually perish, but not this year. Thus, I'm just hoping to keep the money on this play. If I get put the stock, I'll either sell covered calls against or just sell it out, but it's not a long term hold for me, more of a high premium play.

Sold 10 puts, EPIQ Nov 22nd 12.5 strike at .25 bringing into my account $250 (gross before Commission) I want to own this stock for the next 3-5 years or less because the more bankruptcies pick up, the more money this company makes. Talk about ruthless, wow! Sometimes you have to be to make a profit and this company is like sharks just swarming around this weak economy, looking to make money on those in corporations that are in trouble and its working. Still with all of the selling in the market place, I'd rather just try and buy this stock about $1.75 cheaper than its current price on a cost adjusted basis including the premium I took in. If I don't get to buy the stock this month, I'll try again next month.

This is just a way, for a guy whose made over Five Million Dollars in the stock and options martkets to share his thoughts. I need to make a diary of my trades anyway because it helps me to remeber why I made the trade in the first place, just in case there is a material change in the reason, this diary will jog my memory back to the time when I made the trade.

With all the talking heads on TV and sentiment and volatility always changing, it's easy to panic, but when you have a diary, I find that it gives you peice of mind a staedy hand. This way I won't act out of fear, but I'll act only for one the rerason, why I put on the trade in the first place and has anything changed since then.

You'll find my strategies is to pick up option premiums to the tune of $100K-$200K per year while I slowly build a portfolio of stocks getting ready to come out of the reccession. I also believe that this will be an extended bear and I'm not looking to pick up stocks to fast, even though I think that they are cheap now, I also believe that through redemtions and panic that they will get even cheaper. I'm salivating wanting to buy stocks at the current levels, but I will act with patience and wait for them to come down even more.

While I am waiting, I'll be selling way out of the money puts, so if a stock does really tank down to where it should never be, maybe I'll be lucky enough that on expiration day it is below the strile and I'll pick up some stock cheap, otherwise, I'll happily keep the premium and try again the next month as IMHO I believe we will have plenty of time to buy on the cheap, sop there is no rush.

This is todays trades only as I have been keeping this journal online for about a week or two and it been fun sharing.

If you want to see my old trade you can, buit I'll post the new ones on here daily.

So you've made $541 in a day, and you're saying you've made $5million in the market. Assuming that's an average day and you never take any time off that's about 40 yrs in the market ($541 X 250 trading days a year = $135,250). Your strategy looks ok, but you are either doing a lot of things you're not telling us about or you're exaggerating a little on the $5 million.

I also sell options to fund stock purchases or mediate risk elsewhere in my portfolio, as I do with futures. It's a sensible approach if the options are liquid and they don't go against you. With the volatility we have experienced lately I would say selling naked options is over risky unless you sell straddles.
After looking at the options you posted, I wonder why you don't use contracts that aren't so thinly traded, at least you'd have a shot at getting the ask once in a while. The FQUWV (EPIQ Nov12.50 puts) didn't trade at all today. They are pretty close to the money as well, but if you don't mind owning the stock at 12.50 it's reasonable.