Food for thought on one portfolio construction
On this new acct I am managing for my mom, I have fewer names but much better diversification and risk because I am more balanced by sector, by source of idea, by maturity, by distance to strikes, and with less leverage (currently 1/3 of my own maxed out leverage). It is amazing how much less worried I am on this acct.
As an aside, if put, CLF would represent 13% of acct value. In buying power terms, it uses 1.5%. Other names include an AMZN put spread expiring today worthless probably (0.5% of buying power), CETV shares (2% of buying power with 1/5 covered by Aug calls - looking for full coverage but did not fill), ADTN Aug 19 puts eating 2% of acct value, BPI Aug 7.5 puts worth 1% of power, CVX Sept $92.5 puts worth 2%, FLS Aug $100 puts worth 1.5%, INFY Aug $35 puts worth 2%, IDCC Jan $27.5 puts worth 2% (assuming double weight since ATM), NTES Aug $50 and $52.5 puts worth 5-6% and maybe more if on special list (started at 2% but stock cratered and I added a bit - this review indicates error of adding given its weight was prob 10% at time of add given ATM nature then vs now), STX Dec $19 puts worth 2%, LCC Jan $4, $5 and $9 puts worth 4% of power, and WLT $27.5 Sept puts worth 3-4%. If everything goes out worthless, the acct should make about 12-13% over 3-4 month avg hold with about 30% of power used - glad numbers added up close. This means though like 2-3x leverage but with generally large cushions over short periods.
Granted, I picked the start date of trading and was only a bit early with small losses but I am not stressed on this acct. my own acct can't be slept with. I have 4-5 big names trading at or near strikes and have lost 1-2% of acct value from 1-4 pm each of last three days (from up big each day to flat or down in case of yesterday which had biggest gain at 1 - ugghh!).
Jon |
