2025.09.09 Making Sense of U.S. Payroll Data

You guys see the huge revision in the March employment estimate? US payrolls reported in March (number of people who were employed during March) revised down 911k - a record revision. I’ll try to make sense of it here:

“The preliminary estimate of the Current Employment Statistics (CES) national benchmark revision to total nonfarm employment for March 2025”: 911k, is 0.6% of the original estimate; the average error (or revision) has an absolute value of 0.2%. March 2025 surveys reported 158,506,000 (establishments) and 159,398,000 (households) people employed; with their black magic, the BLS base estimate was 158,487,000. 

Each month, the BLS conducts surveys of households and businesses to estimate the number of people employed. The number released today (-911k) is the first revision to the employment estimate for the calendar year (March 2025). Most data for revisions are based on reports by Federal-State unemployment insurance programs; revisions are also based on annual surveys that collect results from one third of all businesses on a rotating basis - survey a particular business every three years. 

Revisions are primarily attributed to the difference between monthly survey data and filings for unemployment insurance. If people are employed, but not reported via unemployment insurance filings, we should expect an overestimation of the initial employment estimate and a negative revision; undocumented workers reported on surveys for example. Revisions are also impacted by allowances for “nonresponse errors”. 

https://www.bls.gov/news.release/archives/empsit_04042025.htm

https://data.bls.gov/pdq/SurveyOutputServlet

2021.06.24 Fourth Short-Put Option Contract Closed – RBLX

Our fourth put option contract closed today. Roblox Corp (RBLX) is up about 2.5% today and we no longer have downside exposure to the shares because our put option contract (strike: $70; expiration: 16JUL2021) was purchased after 16 days to close for $40 and net $88.63. We earned 1.3% on the $7,000 at risk for the trade or 28.9% on an annual basis; and 68.5% of the premium over 42% of the time from initiation to expiration.

2021.06.24 A Third Short-Put Position Closes

Skillz Inc (SKLZ) shares are up around 6% today and our short position in two put option contracts (strike: $15; expiration: 16JUL2021) closed to net 2.1% over 14 days. With just $3,000 exposed to the trade, we cleared $63.25 for an annualized return of 55%. We netted 74.7% of the premium over just 38.9% of the time to expiration.

2021.06.24 Short Positions in Put Options Close as Markets Soar

We’ve had a good run (the markets, that is) over the past month. Since mid-May our portfolio is up roughly ten percent and we’re threatening to reach an all-time high value of our portfolio.

This morning two of our outstanding short positions in put option contracts closed on standing limit orders when the market opened for today’s trading.

Our Cloudflare (NET) contract (strike: $85; expiration: 23JUL2021) closed after nine days to net $136.31 (1.2% of collateralized capital). With about a month remaining until expiration, we netted 68% of the premium and live to sell the contract at a later date. NET shares have skyrocketed over the past few weeks and our shares were called away for $85 on a covered-call option contract last week. This put option was written to reestablish a long position in NET but the upward trend has continued.

Our first exposure to Upstart Holdings Inc (UPST), a recent Motely Fool recommendation, was also closed at today’s open when our short position in a put option contract (strike: $80; expiration: 30JUL2021) closed to net $178.63 (2.2% of collateralized capital). After eight days holding this contract, just 18% of the time from initiation to expiration, we earned 71.6% of the premium. UPST may be a promising company, but I’ll pay $70 to net $180 for a 101.9% annualized return whenever the opportunity presents itself.

2021.06.23 SQ Covered Call Rolled Up and Out

As with my earlier post on a SKLZ covered-call option contract, yesterday, I rolled a covered-call option contract for Square (underlying ticker: SQ; strike: $260; expiration: 25JUN2021) out and up. The SQ call was more profitable to close out: we netted $93.63 on the contract (89% of the premium) over 21 days. SQ shares are up more than 3% this morning and would need to appreciate just another 5.7% to reach the $260 strike of the contract we closed three days early.

Our new covered-call position expires in three weeks (and two trading days) with a strike of $290; 11.5% higher than the strike on the option we closed today.

2021.06.24 PROG Call Option Contract Sold for Loss

I bought five call option contracts on PROG (strike: $5; expiration: 16JUL2021). This was a mistake. With the contract expiring in three weeks and PROG up 10% today I sold the contracts for $0.15/share when yesterday’s bid was $0.10. Good riddance. We lost $805 over 136 days on a $865 investment. I’d be less upset if I didn’t make the mistake of buying a contract that expires in five months – or buy contracts on the wrong underlying company! I want to get this post of the way and burry it in the deluge of posts I plan to make in quick succession after not blogging for almost two months.

2021.06.24 Rolled a SKLZ Covered-Call Up and Out

Yesterday, I took the opportunity to close our las remaining covered-call option contract on Skillz Inc (underlying ticker: SKLZ; strike: $20; expiration: 25JUN2021) to net $33.63 and sell another contract (strike: $25; expiration: 16JUL2021). Though the $20 strike contract netted just 48% of the premium over 34 days we held our shares to trade another day, avoided short-term capital gain (our shares are up 18%), and we sold another call option on the same 100 shares. Today, SKLZ shares opened above the $20 strike with two full trading days and the opportunity to close the short position at a profit may not return before expiration.

2021.05.04 REAL Call Option Liquidated

Happy Star Wars Day! I took a walk while listening to a Bloomberg Wealth Conference and decided to liquidate our long-dated call option on Real Real (REAL; strike: $20; expiration: 20JAN2023). Real Real isn’t a recommendation on any of our services, but, in last November, I heard of it on a podcast from The Motley Fool and bought two call option contracts with long dated expirations. The first contract was closed after just 22 days for a 75% gain and today we closed the second contract for a 95.5% (155 days after it opened).

We need liquidity in our portfolio – roughly just 10% is not invested or covering a put short position in a put option. I have no real conviction for REAL; it’s an online clothing consignment/reseller that has not been an official recommendation by our newsletters. This was a speculative investment and I am glad to have an $866.11 return on $1,011.95 invested. We didn’t make a killing, but I’ll take it and cut bait.

2021.05.03 Closed Two Covered-Call Contracts; APPH, SKLZ

AppHarvest (APPH) did not have a good weekend – or so it would be inferred based on our APPH covered-call contract (strike: $18; expiration: 7MAY2021) being closed for $25.68 – APPH closed at $17.10 on Friday and fell to 15.72 by noon on Monday. Today APPH is trading around $15.50 – its been a rough week for APPH. We’ll liquidate the APPH stake via covered-call to move its exposure to tax-advantaged accounts. Oh, we didn’t make much on this contract, just $23.63, but for a contract with a $18 strike, that’s not too bad.

Source: MarketWatch.com; 4MAY2021

Skillz (SKLZ) dipped yesterday so I closed one of our SKLZ covered-call contracts (strike: $17.50; expiration: 7MAY2021) before it expired on Friday. We netted $71.63 on the contract over 12 days of capped upside on our shares and SKLZ is up today – when the rest of the NASDAQ is being murdered. to Glad to have this contract closed with SKLZ trading a quarter from our strike (it’s up about $0.75 today); glad to have made a bit of money on the trade; and glad to have 100 SKLZ shares not due to be called away.

2021.04.30 SQ Covered-Call Contract Expired

On Friday our covered-call contract (Strike: $260; expiration: 30APR2021) on Square, SQ, expired out of the money. We established the short position on this contract just the day prior after buying to close our previous covered-call contract (strike: $265; expiration: 30APR2021) for $25.68. The expired contract netted $38.31 so we gained about $12 by closing the contract and selling another.

With a day to expiration, our $260 strike contract was 5% above the market. SQ had to appreciate 5% last Friday to have our shares called away. Low risk, and $12 was our low reward.

SQ shares have been hammered today, Tuesday, May 4th so I plan to wait a for an up day to sell another covered-call on SQ but another covered-call option contract will be sold on SQ. Perhaps we would have been better off had our shares been called away at $265, only time will tell.

2021.04.29 Closed a Covered-call Option Contract on APPN

This afternoon our covered-call option contract (strike: $200; expiration: 18JUN2021) on Appian (APPN) shares. Like the SQ covered-call, we’re trying to liquidate exposure to APPN (half of our exposure) – but in this case to generate liquidity and greater capacity to write cash-covered put option contracts.

APPN is down more than 6% today, as I type this trade summary, but down more than 50% from the 52-week high in February. Our strike for the closed contract was 51% higher than the market’s price for APPN this morning. I plan to write another covered-call contract for APPN when the shares display upside volatility but we made $43.63 on this trade with just three days of exposure.

November 2020 through 29APR2021; source: Questrade

2021.04.29 Closed Covered-calls on AAPL and SQ

Two covered-call option contracts closed this morning and but that’s the only similarity shared by the two positions. Our Apple (AAPL) call option contract (strike:$140; expiration: 21MAY2021) was designed to earn some extra cash but, with shares trading within four percent of our strike, I set a very aggressive limit order to ensure our shares are not called away by the option execution. We netted only $9.62 on the AAPL call trade but I want these shares in the portfolio without the headache of capital gains.

The Audible audiobook version of Becoming Steve Jobs was on sale for $6 this week and I bought it immediately. Thanks to the ode to AAPL’s founder convinced me to buy shares and my only regret is not buying more. We’ve owned it since it traded between $500 and $700 (before the two, most recent- splits, ~$21.43 adjusted) in the early 2010’s (in the kids’ edu account). In our taxable account, our position was established for $23.93 per share.

Our expiring position in a Square (SQ) covered-call option contract (strike: $265; expiration: 30APR2021) was closed for $25 as the shares dove. I did roll down the position to a strike of $260, same expiration, for $39. Remember – I want to liquidate half of our SQ exposure and move the position to a tax advantaged account. SQ is trading south of $248 and I’ll continue to write expiring covered-calls on the position until it is liquidated. In the past ten days we’ve closed three SQ covered-call contracts netting a total of $191.88 ($64.63 on the most recently closed). Since March 2020 we’ve netted almost $700 on SQ covered-call contracts; despite paying $276.39, net, to close one (strike: $170; expiration: 25SEP2020) and $477.39, also net, to close another (strike: $200; expiration: 9OCT2020).

Depending on tomorrow’s price action, I may close the newly opened SQ contract and sell a longer-dated contract but I expect to let the S260 contract expire and issue another contract if shares rebound next week.

2021.04.26 Closed Cash-Covered Short Positions in TRUP, SKLZ Put Option Contracts

Today I closed two put option contracts on Skillz (SKLZ) and another on Trupanion (TRUP).  The TRUP contract (strike: $55; expiration: 21MAY2021) was active for 21 days and netted $108.63 or 2% of the required capital to collateralize the trade. I like TRUP as a play on humanizing pets and plan to add more exposure to the company when the opportunity presents itself.

The two SKLZ contracts (strike: $13.50; expiration: 30APR21) were open just four days but netted 3.2%, $87.25, on just $2,700 capital. SKLZ has had wild ride of late and rallied after a severe downfall during which we were distributed 300 shares. Unfortunately the rally over the past three sessions have exceeded the strike price of the three covered-call contracts I sold at the outset of the rally. I like the company’s long-term potential but we’ve experienced extreme volatility of late. Hopefully the volatility proves profitable.

2021.04.23 Rolled Down and Outa SQ Covered Call

On Friday our position in a Square (SQ) covered-call option contract (strike: $270; expiration: 30APR2021) was closed on our standing limit order. We netted $103.63 on the trade over just three days. We also sold a contract to replace this covered-call option position with a contract expiring on the same date with a strike of $265.

We have the extra 25 shares in the tax-advantaged and I’d like to liquidate our SQ shares in the taxable account via covered-call option. The plan is to maximize the profit on our current exposure and establish less exposure in an account that is not liable for tax on our gains.

2021.04.22 AI Put Option Closed

On Thursday our short position in a C3.ai put option contract (strike: $50; expiration: 21MAY21) was closed to net $98.62 or 2% (55.4% annualized) on our $5,000 collateral over thirteen days of exposure. We’ll continue to observe the volatility in the newly publicly traded company to find more profitable trades. We also have a small long position, just 15 shares, in AI and look forward to the company being a more prominent position in our portfolio.

2021.04.20 SQ Covered Call Rolled Up and Out

On 29MAR2021 I wrote a covered call contract (strike: $260; expiration: 23APR2021) on our Square (SQ) shares when they closed at $207.18. Last week SQ shares closed as high as $273.23 – nearly 32% higher than when we initiated the trade. I actually bought 25 shares for roughly $255 in a tax-advantaged account to hedge against this contract expiring in the money.

We’re now underwater on the new shares as SQ shares fell about 10% from last week’s high and the call option contract was closed on an aggressive limit order when SQ closed around $245 today. We netted just $23.62 on the contract that was active for 22 days but I sold another contract (strike: $270; expiration: 30APR2021) for $180. For another week of upside exposure we added $80 worth of option premium and $1,000 in liquidation value. If next week’s market presents a similarly attractive opportunity to roll up and out our new covered-call contract I will take it, too.

Source: MarketWatch.com

2021.04.16 NET Covered Call Option Contract Closed

Our Cloudflare covered-call option contract (NET; strike: $85; expiration: 23APR2021) was closed on our standing limit order as NET shares continued to be quite volatile. Our position in the contract was only active for three days. We opened the position when NET traded above $79 per share on 13APR but retreated to close at $74.24 just two days later on Friday.

We netted $65.63 on the trade and though our cost basis for our 100 shares is $89.30, through our covered-call contracts, we’ve reduced the effective breakeven price to $80.80. When NET shares reverse their recent downward trend, we’ll write another opportunistic covered-call option contract.

2021.04.16 SKLZ Put Option Contracted Expired In-the-Money

Skillz (SKLZ) is a newly public company that provides a new platform model for game developers to and players. For a modest fee players can play mobile games without intrusive advertising while avoiding pay-to-win model. Developers are duly compensated and players have a chance to win money for strong gameplay. This was what I gathered from the recommendation in our newsletter.

We earned a 4% return on previous put option contracts we closed 19MAR2021 but, as you can see the above chart, over the past month, SKLZ has followed the same downward trajectory as many other newly public companies. Our three contracts (strike: $17.50; expiration: 16APR2021) expired in the money last Friday when we could have bought three hundred shares of SKLZ for $15.11. To calculate the return for the trade, we subtract the difference paid for our 300 shares from the market value, $717, from the premium for which we sold the contracts, $147.93. We lost $569.07 or 10.8% on these contracts.

Source: MarketWatch.com

I like the long-term prospects for the business and plan to write call options on at least 200 of the shares we own.

2021.04.15 Closed a LMND Put Option Trade

This morning our short position in a Lemonade (LMND) put option contract (strike: $70; expiration: 7MAY2021) was closed as shares spiked within the first hour of trading. Our standing limit order was filled to net $63.63 on the $7,000 in capital collateralized for the trade. Over the eight days the trade was active our return was 0.9% and 41.5% on an annual basis.

LMND shares have reversed their direction as today’s trading has progressed so I plan to look for another opportunity to trade this, or similar LMND, put option contracts.

MarketWatch.com

2021.04.14 Closed APPH Put Option Contracts

Yesterday our short position on three AppHarvest (APPH) put option contracts (strike: $14.50; expiration: 30APR2021) were closed on our standing limit order when APPH shares moved from $16.30 at the open to as high as $17.75 during the trading day. Over five days we netted $55.89 or 1.3% on the $4,350 exposed to trade.  Shares of APPH have continued to trade with volatility so I’ve entered another order to sell three more contracts (strike: $14; expiration: 7MAY2021).

Source: MarketWatch.com