My Current Portfolio

There are many reasons I prefer to trade options. When buying options, there is already limited loss, however, the time decay may be the killer! So, there are people who make money by selling options. I learned it thanks to Option Premium Collector (OPC):

http://optionpremiumcollector.blogspot.com/

There are many things OPC and I learned from this experience specially during the severe down times. One good strategy is selling naked puts on the stocks/ETF's you would really like to own if they are put to you at expiration. The other strategy is covered call, again on the stocks or ETF's that you like to own at a cheaper price. Then, there is hedging strategies by buying protective puts. With all I learned from OPC and my own experience, I have my own strategy combined with collecting option premiums. Here are some ideas I use:

1) Selling puts on leveraged ETF's is pretty risky, while it could also be very rewarding. However, with the natural time decay on the leveraged ETF's, it makes it more possible to hit the previous minimums. 3X ETF's are the worst in this case such as ERX and FAZ. I personaly had the experience of selling naked puts on these two, and realized they are not for me!

2) It is best to sell way out of the money puts and with at least one month till expiry. This makes the decay work very well.

3) With some of the premium collected, I would like to buy calls and/or puts on very volatile stocks. There are two ways to do that. One way is to prepare for a volatile stock that is going to report earnings in 1-2 weeks, and try a straddle or strangle with same number of contracts (approximately same dollar amount). The other way is to have a bullish stock and bearish stock, then buy calls on the bullish one and puts on the bearish one. These stock picks should be done very carefully. You don't want to lose all the premium collected on wrong trades.

Ok. Lets go to my current portfolio. By the way, I am subscribed to a weekly sentiment report for the market, so I try to make my picks based on their advice. Here is my current portfolio:

GDX May $29 naked puts at average 90c/contract (6 contracts), net debit: $540
JAVA May $5 naked puts at average 40c/contract (6 contracts), net debit: $240
MSFT May $16 naked puts at average 31c/contract (4 contracts), net debit: $124
Bought May C call options strike $4 for average of 17c/contract (4 contracts)
Bought penny stock CTIC for 100 shares (just for fun) at around 0.4/share

I try to stay away from buying April optins at this point as the time decay is really a killer. I am still seeking for a bullish idea to purchase call options on.