It was a good month for chip stocks and we collected most of our profits from the continued strength in the tech sector.
Tech stocks were 75% of the S&P rally in October and we were there to collect our fair share of the cash in my Options Income Blueprint service in the chip market. The “Chip” stocks remained the hot income play for another month as pricing in the flash memory market is firming and demand should keep it that way as we enter into a new product cycle for smartphones.
We went back to a recent winner, memory chipmaker, Micron Technology [stock_market_widget type=”inline” symbol=”MU” template=”basic” color=”default”], selling weekly put options three different times in October totaling of $507 in cash income. Memory chip prices have firmed, and the company’s earnings beat expectations earlier this month. The $40 level is a strong support price, which held nicely, and premiums are great. What’s not to like?
And we added another $114 from Applied Materials [stock_market_widget type=”inline” symbol=”AMAT” template=”basic” color=”default”], is the king of the semi equipment sector and at the core of new chip making facilities
Our big winner this month was Western Digital [stock_market_widget type=”inline” symbol=”WDC” template=”basic” color=”default”], the hard disk drive and flash memory company, who’s stock has been in-and-out of the news lately generating more volatility in the stock and giving us nice premiums in the options. We sold a weekly put option, rolled it twice and got out after 10 days with a nice $465 profit.
We did close out one trade this month at a small loss to free up capital… you can’t win them all. But our simple strategy of selling weekly options each week allows us to collect cash on Friday’s regardless of market movements up, down or flat that week.
Year-to-date we’ve closed 73 or 95% winning options income trades with only two losing and two break-even trades generating over $15,771 in cash and a 31.3% return.
Next up: November… Tech stocks are likely to continue their tear this month as a result of good earnings reports and frothy demand from growth hungry investors. Our “Weekly Paycheck Strategy” will allow us to move in and out of several positions before and right after earnings so we can walk away again in November with more cash in our pockets.
I hope you can join us. The easiest way to get started is with my Options Income Blueprint “no-brainer” 60-Day Test Drive. Get the details here.
About The Author
Michael Shulman is a 30 Year Veteran of the financial markets – as a trader, a financial analyst, a financial writer and most recently as an educator.
Mr. Shulman made his first option trade in 1985 – COMPAQ Computer calls – a position that expired worthless. His second trade broke even; the third brought him a year’s salary, a near twenty to one return on his investment. He has never looked back. He entered the financial publishing business formally in 2001 as director of research for ChangeWave Research’s institutional research business and as the writer and editor of Hedge Fund Investing.
He has published two books – Sell Short and Made in America – both of which can be found on Amazon.com, and he is a frequent contributor to reputable financial sites like Seeking Alpha, MSN, MainStreetInvestor, and Traders Reserve.
Most importantly, since 2010, he has dedicated himself to teaching income investors how to get more income from their portfolios using simple yet safe options selling strategies which produce income every week. This approach was developed from the ground up in Mr. Shulman’s own accounts, his goal to develop a strategy that cannot be replicated by institutional investors of any size and therefore independent of fads and trends that change too often to provide a consistent approach for individual traders.
His trade recommendations in his Options Income Blueprint, Perpetual Income Portfolio Club and Income Masters services maintain a 98% success ratio, meaning his trades produce the expected income 98% of the time. No one’s perfect.