It is hard finding a 'safe' (if there is such a thing) put play. I still like AMZN for several reasons.
1. Earns come on Thurs night This gives you time to let the option premium drop down.
2. There seems to be no decent plays that work during this volatile week. More on this later.
Worrisome is some parts of AMZN. It is in an up mode. But I don't like the PE of AMZN 68. That is getting high! A comparison is AAPL which is 23 but NFLX is 63, BIDU is 102... Goog is 24. So you can see that with a DOW average PE over the years and years of around 14. this gives you come idea if a stock is 'off the chart'.
AAPL reports on Monday night so there might be some good plays on Tues morn? I would stick with the newer weekly's until things settle down some (earnings)
I have to admit that I am really liking the weeklies. The quick time decay is great. Some problems you have to adjust and live with are lower volumes (open interest) But to work around items such as earnings, they work well. So the plays i like are AMZN (have a plan regarding the Thur earns) I now have 60 of the 125's. I will either let them go until
Thursday or maybe if AMZN continues up on Monday i might roll into the 130's or 135's. Right now the 125's = about .06% return. The 130's = 1% and the 135's = 1.5%... Never forgetting the difference between us (winners) and many other traders is they would be going for the 145's etc. Baby steps and soon you will be running. So good trading and I will post my next plan on Monday during trading hours.
2 comments:
I agree on the appeal of weeklies. One plus is that, for slightly less income you can be out of the market on Mondays (does "black monday" ring a bell?). Also, you reset your strikes each week vs sitting and waiting over 30 days, so higher odds of expiring worthless.
I agree Glenn. Weeklies are quickly becoming my only trades. Now when I look at monthlies I shudder at the length of time to wait for potential bad news. When I was doing more of the monthly puts, I did do a lot of rolling up etc to keep churning profits and the "time" factor.
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