Sunday, June 21, 2009


We had another good group for the Powerstroke clinic yesterday at TAC. Afterwards we had an early dinner with some friends, then hit the sack before 10pm. I slept like a log last night and got up feeling refreshed this AM. Jumped on the bike for what was meant to be a 2 hour ride but it turned into 3 hours. I am getting fit, like it or not!

Ordered a new license plate for our Xterra; NC has a commemorative Buddy Pelletier plate and I put "YARR" as our custom word. "YARR" is short for "Yarrrr, I'm a pirate!"

I wrote my first put option contract this week. When you sell a put contract you're agreeing to buy 100 shares of a stock at the designated strike price. The premium you collect is your payment for taking on the risk that you'll have to buy the stock at X price when the contract matures; the downside is that the stock price is actually X minus whatever. For example, you write (sell) a put contract of DOW $14 strike price in July at $30.00. You collect $30 bucks (premium). On the 3rd Friday in July if DOW is trading above $14 you keep the premium of $30 and the contract expires worthless - no obligation to buy. If DOW is trading below $14 you're obligated to buy 100 shares from whoever bought your contract. So your break even in this scenario is $13.70 on DOW. The risk is your opportunity cost to commit funds to the purchase and the possible spread between your strike price and the actual price on expiration.

I held off on put contracts because they are not as intuitive as a covered call option, where you buy 100 shares and then write/sell a call at a strike price that may be in the money, at the money, or out of the money.

My training stats for this week:
Swim: 2 hours
Bike: 6.5 hours
Run: 3.5 hours
strength: some pushups/situps, no Kung Fu this week.

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