Trade Recap for Jan 20, 2016

Interactive Brokers is great in low commissions and no assignment fees but cruel to those traders who do not trade within the minimum cap.  I did not trade for Nov/Dec 2016 and were hit with fees:

2016-12-02	Balance of Monthly Minimum Fee for Nov 2016	-12.03
2016-12-02	US Securities and Futures Value Bundle for Nov 2016	-13.44
2016-12-02	OPRA (US OPTIONS EXCHANGES) (NP,L1) FOR NOV 2016	-2.02
2017-01-04	Balance of Monthly Minimum Fee for Dec 2016	-12.35
2017-01-04	US Securities and Futures Value Bundle for Dec 2016	-13.43
2017-01-04	OPRA (US OPTIONS EXCHANGES) (NP,L1) FOR DEC 2016	-2.01

In order for me to get a credit for those fees:

1)  Trade a minimum of $10USD in commission to eliminate the monthly minimum fee

2)  Trade a minimum of $20USD in commission to eliminate the US options exchange fee

3)  Trade a minimum of $30USD in commission to eliminate the US security and future value bundle fee (I am thinking of discontinuing the subscription for this one and just using Google real time to place my orders if need be)

TFSA	SHARES	AVG COST
EMA.TO	Added 100	$45.55
FTS.TO	Added 100	$41.23
RPI.UN	Added 200	$23.57
RRSP
SRU.UN	Added 100	$31.85
NON-REG
TEVA	Assigned 100	$34.00
TEVA	Sold	-$34.10
PEY.TO	Assigned 100	$30.00

Option	Accounts (Position)
TEVA 13JAN2017 34 P BMY 20JAN2017 64.5 C	Got assigned (-1) (-1)
KO 20JAN2017 40 P	(-1)
PEY 20JAN2017 30 P	Got assigned (-1)
WMT 20JAN2017 60 P	(-2)

There are many ways to play the options market.  I am mostly a option seller.

By selling naked puts, I am collecting a premium from the start of the day I open the position.  My goal here is to sell out of the money (OTM) below market value to avoid assignment and collect premiums.  If you want to own the stock anyways, this is a great way to get the stock at the price you're willing to pay with additional premium.  

By selling covered calls, I am collecting a premium from the start of day I open the position.  My goal here is to sell out of the money (OTM) above market value to avoid assignment and collect premiums.  If you want to sell the stock anyways, this is a great way to get rid of the stock at the price you're willing to sell with additional premium.

As you can see, two of my puts were assigned as the stock price reached below my strike price.  As a put seller, I am obligated to buy shares if the share price dips below my strike price as did for $TEVA and $PEY.TO.  For $TEVA, I was able to sell my shares for a higher price the next week (Phew, it is currently trading at $33.23 as of Jan 20th, but I still have another put in play that has not expired yet).  For $PEY.TO, I may sell a covered call at a higher price further out date to get a premium.  It is a monthly payer, so I do not mind holding this for a while.

If you do not want to own the stock or sell the stock (do not have the shares which is a naked call), there is another way of avoiding assignment by closing your position for a loss and reopening another position on a further out date for a higher premium to offset your loss.

Sometimes, I like to make bets on the direction of the market by buying PUT on $SPY if I am bearish or by buying CALL on $SPY if I am bullish for the particular time frame.  I will buy puts/calls and if I'm right, I can make money pretty fast if I hit my target strike price and it goes beyond that.  If I'm wrong, well I can lose my bet pretty fast too.  By buying options, I am only losing the premiums I pay for and is very time sensitive.  This by far is risky and you need to be very aware of the market conditions.