The first paper trade

So, Ken inspired some thinking yesterday. The sideways move on FCX . . . sounds very Aikido. Now, I still know nothing about the risk calculations and I wasn't going to have time to talk to a coach with the vacation planning, so I decided on trying my own hand using our paper money.

I did my research and found a very tempting scenario so, I'll spell out my paper move from yesterday here (for you to check), but I'm not going to count it in my ongoing portfolio updates.

So I did a little looking around and found two interesting spreads for Sept:


CALLS:
Strike @ 95 for .58
Strike @ 90 for 1.5

PUTS:
Strike @ 75 for 1.1
Strike @ 70 for .5

I traded 10 contracts in each. So, my exposure on the shares should be $5K (I can't lose both!!) with an immediate income of 1,520. This puts my maximum risk at 3,480. If everything pans out, I should net 4.08 per share on the CALLs and 4.4 per share on the PUTs. If my math is right, I have a potential return of 44%!!!

Check my math peeps . . . and my risk!

Evaluating the Current Portfolio

So, before I begin tracking the investools strategy here, I needed to evaluate my current portfolio. Also, how does the fact that I have a current portfolio affect the results I plan on reporting here??

As for evaluating the current portfolio, I currently own 3 stocks: AAPL, PCU and FCX. AAPL just got a buy signal at 135.5 and the fundamentals are sound. I'll hold, but for this exercise, I'll reset my returns and track as if I had actually gotten in @ 135.5 PCU and FCX are trickier. Both have two green arrows and closed close to the 30 day moving average. FCX passes Phase 2 while PCU does not. Both are on tremendous upswings. Though it doesn't matter, I should point out that I am off ~7% in each already. I could take the small loss and love it or ride it out. Both are really strong on Phase 1. For today, I am going to hold them both but not track them in this strategy . . . they don't fit the investools model. I would love if any of my class buddies are reading, some input on these two stocks . . .

So, there you have it, the first investools move. When I make moves, I put them at the bottom of the post, so here is the first one.

Today's Moves:
In AAPL @ 135.5
Current Investools Return: 0%

Chronicling the Journey

Jen and I are attending the second day of a stock trading seminar from Investools. We are both totally stoked about this system and will be putting it into place over the next few weeks. I've decided I am going to chronicle our journey here. I'll be posting what stocks we evaluate, watch and move in and out of. I'll even keep a running return rate on our new portfolio. If you are interested in how well this system works for two average Joes, pay attention to posts under the investing label. I'll do the posts as I make moves so if you like my returns, follow regularly to see what happens.

Woot!

I am an active investor!
Wealth is now here!
I choose wealth!