Welcome to the page that discusses Put Options

I want to start this blog by telling you that I have no 1-800 number, I am not trying to sell you any newsletter with the next great stock idea. I am not inviting you to come to my house and view a cleaning agent. I will not try to sell you plastic bowls or any other ‘can’t miss’ ideas. I do not have any life changing secrets and I cannot promise you a flat stomach.



I am going to share with you my daily option moves and the reasons behind them. My way of trading options are of course not the only way to utilize Put Options. This is a way that I have found to be simple and easy and not as complicated as some make this business. My hope is that you can develop a steady stream of income and continue to enjoy your life.











Tuesday, November 30, 2010

Some last minute puts

I just sold another 15 of the NFLX puts at the strike of 165.

NFLX is trading around 206 I received another 806 for a total of 1960 in all. This position requires 52140 in maint So the monthly return is 3.7. This is with 71 points of cushion for 2.5 weeks.

mis-print on RIMM trade

Earlier I said I opened the RIMM trade while it traded around 179 or so. Actually the stock traded around 62.5. (not enough coffee yet)
Most of today's trades are around 20% below the current stock price. With a little over 2.5 weeks to go I feel pretty good. The closing of my LVS position and the associated CC's was probably premature but I didn't like the direction the stock was taking and as you have probably seen with some of my trades, if not comfortable with a position I don't hesitate to make a move. My thinking is you can't be the deer in the headlights.. Make a decision..The decision might be to do nothing and that is valid. I advise traders to not get 'stuck'. Oh-oh should i sell.. or keep or do nothing etc. The pressure builds and 'STUCK' builds. One of my ways of looking at a position when worried is "Would I open this position at this point?" If the answer is NO-WAY! To me that is a good time to close it now. I don't waver of waffle, I close it.

OK, todays trades

This morning I sold puts as follows REC maint return
30 RIMM 179.5 -sold the 50 strike and 752 16440 4.57
30 FSLR 122.5 95 962 29670 3.2
15 nflx 202.5 165 1154 26070 4.4

Those are today's trades. I have some maint. left so I will continue on looking for a safe looking trade or two to finish some maintenance. So far with all of the up and downs with the stock and covered calls, I am around 4% for the month if all expire as planned. I will enter all on my excel sheets and get an exact number later today.

I'm home again

Hi traders, I returned home late last night, I was away for a few days and only had a chance to make one quick trade on Monday morning. I sold my LVS stock and closed the cc's for the 50 strike. I will relay all the info on the trades a little later today. Right now I have some trading to catch up on. I will try to not get off course and do any CC etc for awhile. Of course all of these method work and it isn't bad to input a few different plays now and then but generally it is best to specialize. For me that is puts! So back to the screen to see if I can find any weeklys or others that fit my way of trading. I hope to have my plays and the results posted by 8:30
Jerry

Wednesday, November 24, 2010

Mental gymnastics

Well, I made some moves this morning regarding the LVS CC's.
I bought the Nov 26 50 strike CC's, a -1216 loss.
I sold the Dec 3 CC's for +6572 gain
So when the dust settles, if LVS stays above 50 for another week I will net
3395 for two weeks trading. This will lower my cost basis for the LVS to around 48.85. Dang, this is more work than I wanted when I entered this trade! Jerry, get back to puts and 'easy money'!!!

Trade trigger activated

Ok,I now own 3000 shares of LVS... This is a classic case of being 'whipped-sawed' My shares were bought at a cost of 150,240. So it seems if the stock stays above 50 I will make around 600. Yikes, a lot of work for 600 bucks! All of this started with a simple trade that was to last about 4 days and one of those were a holiday.. Now I remember why I mainly stick to naked puts! As the Eagles said in one of their songs
" The lure of easy money has a very strong appeal"... How true.

Tuesday, November 23, 2010

Hmm, this covered call didn't work out like it could/should

Yesterday I bought 1000 shrs of LVS and sold the CC's (covered calls) at the 50 strike. buying the stock cost 50.585. sold it today for 48864 for a net loss of 1721. But the CC's made 1407. So I then had 10 naked calls with a potential loss on the position of -314.
This morning after closing the stock position I then sold 20 more naked calls for LVS at the 50 strike. I took in another 1155. I put in an order to buy the 3000 shrs of LVS if it crossed the 50.02 mark.(making these now CC's)
So when the dust settles..Whew.. I could net all of 841 for all this hopping around.
Was it worth it? NO, I don't do CC's often and this is one reason. I could have just held the position and assuming LVS stayed around the 49 point i could have sold next weeks 50 strike again and the same the following week etc. But I don't want to go for coffee and then come back and find the stock trading around 46 etc. So the lesson for me and hopefully you. Don't let your losses mount. Take a loss if you have to and then move on. 10 years ago there were days when i loss 25,000. all because I couldn't pull the trigger when the losses started to mount.

Monday, November 22, 2010

Snow is falling

Wow, the Seattle area is getting snow and cold weather. It has already set the record for this area and this date. It is around 20 deg and traffic is a mess.
How nice it is to work from home. Now If i can only keep the cable and power going I am ok..I still have lots of trades to make tomorrow, lol.

What me selling a Covered Call..yep

HI all. I can't find many trades that i like while trying to use weeklys.
I decided I will sell some covered calls with LVS
If you put 3 traders in a room and ask how they figure their returns, you would probably get 3 different ways.. So what I did this morning and profits are as follow (how I figure them)
I bought 1000 shr's of LVS paid 58,585
I sold the CC's at the 50 strike (covered calls) for 1,420
The CC's are for weeklys So only 4 days to go.
Here is how i figure the results...
received 1420 for the cc
but will sell the stocks for 50. even though I bought it for 50.58 So this is a loss on the stock for 580 [1000 x .58]
So..(keep track now..lol) 1420-580= 840 net if the stock stays over 50
As I only needed 14,817 maintenance this pencils out to 840 div by 14,817= 5.66% return for a weeks work.
I don't do many CC's anymore as you have to put out money while buying the stock. I much prefer to have money coming my way !!! But you must stay flexible in this options field.
I will keep you posted on the results of this play.

A short week

Hi friends,
It is hard to find any good weekly positions with Thanksgiving making for a short week. I will go with mostly monthlies at the open this morning.
Maybe DECK.. trading around 68+ I have an order in to sell the 56.67 put for .30 (monthlies) The reason for such an odd strike is because of the split the stock recently had. A 3-1 on July 6th.
If it doesn't go through soon I will lower my bid to .25
Well 20 went through at .30 and now I have changed the order to 20 more at .25
the ones that went through at .30 netted 580 and required 12,234 maint. this is a return of 4.7%

I just opened some LVS puts for the monthlies. With LVS trading around 50, I sold 40 of the 39 strike. received 965 and maintenance needed is 17360. so this is a return of 5.5%.. You gotta love that.

Saturday, November 20, 2010

November results

Hi Traders
Well my Nov. results suffered some due to my leaving town for 12 days in the middle of this option period.
With a couple of naked calls to spice things up I netted 5164 for the month. Not super, but being cautious and being gone for some time it is acceptable.
I hope all of you that are trading are having success. Keep the comments coming as I learn from each and enjoy reading of the success of other traders.
Get ready December, here we come.
Keep your fingers crossed for a Santa Claus rally.
Jerry

Friday, November 19, 2010

Closed the LVS puts

Well I closed the LVS puts. I had 30 of them and for reasons listed in the comments part of the previous post i decided to close. I made 155 in an hour so it was a good trade.
good luck all..I'm going golfing, keep the market under control while I'm out.

A quick last day profit

Hi all, I just sold the 165 strike puts for NFLX for expiration at the close today.
NFLX is trading around 171.5. I sold 28 puts at .04 I received $86. so just a closing sell to pocket some money on the last day of trading. As I will be away later i will put in a BUY TO CLOSE order with a trigger of 166. this is just a little protection to let me relax while away for the screen. Just a few more crumbs!

Las Vegas Sands? might as well gamble

First trade this morning
I sold 30 puts with LVS. Lvs is trading around 47.5 and I sold the 38 strike price. These sold for a net of .34. The maintenance required is 12,660. so I netted 1,022 for a return of a little over 8%
To me, whenever I open a position and I make over 6%, as a rule I get nervous. Over 6% is a red flag that I am pushing the limit on the strike I have chosen. I will ride this position for awhile for several reasons.
1. the picture for Las Vegas in general is getting better
2. I have over 10 points of cushion
3. the last earnings report beat expectations.
This is the first time I have used LVS. If it works out I will leave it on my 'CHECK CLOSE EACH MONTH' list.
------
At this time I am watching my roll-up with AMZN. I am not comfortable with AMZN dropping some this morning. I break even roughly if I get out at .15
I now have an order in to buy to close the position for .14 I will see how it goes and keep you informed. As I am away from the computer after 9am (Tee time)I don't want to let my profits erode to far.
This demonstrates that option trading is a business. You can not just open a position and not monitor it.
Ooop's I just received notice that my trade went through regarding the closing of my AMZN position.
Here are those results.
first opened at 1557
closed for 224
opened the roll-up for 774
closed the roll up for 521
Net result for the whole position....
I could have made 1557 but I tweaked it some and made and extra whopping $29 profit for a net of $1586. But 29 extra is not a bad profit, just not fantastic. That is trading. The goal is to make money...crumb by crumb.

Thursday, November 18, 2010

A different Roll-up

HI all, After AMZN jumped so much and with only one day left in trading, I rolled my 150 puts into the 160 puts.
Here are the numbers. I did less of the 160's as the maintenance is more.
Sold the 150's for $1557 Wednesday. Bought to close on Thursday for $224 =
1334 profit in a day
Sold the 160 put for 774 Thursday and if it expires worthless tomorrow I will net 2107 rather than the original 1557. So I bumped the profits by 550 by rolling into the 160's.
For protection I put an order in to close the position (the 160 puts) if the stock dropped to 161.25. It is now trading above 164. I will be away from the computer after 9am, so this give me some protection. Hopefully I will know by then which way the wind is blowing with AMZN.
Just tweaking and picking up crumbs.
Good trading all.

Rolling up-- maybe

HI all. Well today I am trying to roll up from the NOV 150 amzn put to the 155 nov, amzn put. If it works it will be a credit of .08 when the dust settles. The order is in and now waiting for results.
The idea and reason behind is that with around 162+ this still will give me me over 7 pts of cushion and only one day left. I have 46 of these so the bump up is only 350 or so. But these crumbs just keep adding up. I also am never one to refuse 350 for a two day profit. I will keep you posted if it all works.
ps; when doing these trades I always put the trade as AON. This is a all-or-none trade. It instructs the brokerage to do AON as i do not want just 3 or 4 to go through and then you lose some with the cost of trading figured in.

Wednesday, November 17, 2010

todays results

Well, as I said, I put in an order before the opening for .40 for the AMZN puts. The order was ignored...lol. The premium was dropping fast as AMZN was ticking up. So instead of chasing the premium and always being behind the curve, I just put in an order for At The Market. These went through at .27. These puts need approximately 25.02 each for maintenance. This equals a profit of a tad over 1% for three days.
*A quick perspective on profits.
I am on a BOD for a home owners association. We have extra funds in our reserve account that require safety and this results in us depositing our funds in MMKT accounts. While searching for some rates with local banks yesterday, I found that a common rate is .9% for a year. So with my private account when i can get over 1% in three days, you've gotta like that.
I am often asked, how I can be happy getting only premiums such as today's .27. I try to keep the perspective that end results are what count.
If I can trade and maintain around 3% MONTHLY, I am a happy camper. As I say in my book, "I just continue to pick up the crumbs around the table."
Good trading all.

I'm back

Hi all, well I'm back and diving in. With a week to go I still like using the last of the Nov puts.
I am selling AMZN puts.
With AMZN selling around 158.3, I'm selling the 150 put.
I anticipate that they will sell for somewhere around .40 at the
opening. With only 3 days of trading left and one of those is starting
off with AMZN heading up at the opening, things look good. The return is around 1.5%. As this is for three days I like it.
If you are thinking of doing any of these (or other NOV) puts. I advise you to jump in early as the time decay will be quick.
Thursday more puts will come on line for all weeklies.
Hope all of you have made some money while I was away.
It is good to be back!

Wednesday, November 3, 2010

Leave of absence

Hi Traders, I will be out of town until the 14th of Nov. I am letting my GOOG puts run as I like them and there is plenty of time.
I think the elections will be good for business. The mkt had already figured in the results so not much action today in the big market. More important news coming during this week. So keep your powder dry, and make careful trades.
See ya in 10 days.

Tuesday, November 2, 2010

OK, I changed my mind

Hi Traders. Yesterday I opened the naked calls with NFLX trading around 167. I sold the naked calls for .73 net or $737.
Today i closed the position for two main reasons.
1. NFLX is heading up over 5 pts so far. This isn't a real problem as
I had a buy order in for the stock if it crossed 184.
2. I am leaving town for 10 days tomorrow and will be out of all contact.
No TV, cell or any other means of finding out what is going on in the
financial world. I could just leave and let the position do what ever it wants, but it is just something that i do not want on my mind while I am gone. If NFLX had gone down some this morning I would probably have left it open as it would have seemed even more safe. It now is possible for NFLX to 'maybe' make it to 185 or above. Not likely butttt....
3. I closed the position for $592 so i made some money in one day -145 when the dust settled.
The interesting part is how even though NFLX went up over 5 dollars the naked call went down. That is a classic example of premium being eaten up by the TIME factor.
As you can see by my trading style, if something goes different than I expected I do not hesitate to pull the trigger. To me that is an important part of trading. You can not be the deer in the headlights and just stare at the monitor wondering ..What's gonna happen next. You have to be decisive. You will be wrong often but hopefully you make profits and sleep better. As I've said in the past, I had those months where I tossed and turned all night. Those days are in the past for me. I will open a position for a specific reason and if it does not work out as anticipated... I close it and move on.
Good trading all.

Monday, November 1, 2010

Additional points regarding my trade with the naked calls

I didn't mention the profit percentage of this trade.
I took in 737 and needed 25,534 in maintenance funds. 25534 div by 737 = 2.88 % return for 4.5 day trade.
Before doing these naked calls that might involve having to buy the stock to cover your 'what if' scenario. You must be sure you have enough stock buying capability (funds). Also If as i mentioned the potential of buying stock and then it dropping back below what was you trigger point (184 in this case)
I will then own the stock and I will either just sell it next week or sell covered calls on the existing stock.
If any questions regarding this type of trade just add a comment on the posting and I will try to answer it as soon as i see your posting.

An opposite type trade

Ok, I hope I don't confuse you with this trade. I am doing a type of trade that I like in down-or flat markets. I am selling naked CALLS..
If you have read my book I have a chapter on this method. It is quite easy and similar but on the opposite side of naked puts.
I sold the naked calls for NFLX
with NFLX trading around 167.5 I sold the Nov 5 (weekly) 185 call.
I sold 10 of them for $737.
My plan is that NFLX will not go up to 185 during this week. And if that happens (stays below 185) then the naked calls just go away. If NFLX starts up i will have in place an order to buy the stock at 184. So the hoped for result is that nflx will then continue above 185 and I will have the stock and it will be called away. So i make another 1000 buy for 184. Called away for 185. This plus the 737. will make a nice profit any way it shakes out. The worst is the nflx goes to the 184 point and triggers my buy order and then drops down. But that is a lot of 'ifs' for only one week.

Closing a position

G'morning, A few minutes ago i closed my NFLX position.
I had sold the puts on 10/22 for +1195.
I closed on 11/1 for -748.
Profit in 9 days of ..............+447
the reason for closing are on at least two levels
a. NFLX is declining today as it is down around $5
b. I had a profit and I hate to give up a profit. Yes it wasn't as much as I had hoped, but a profit sure beats a loss! For me, I acted on the old adage 'You are never wrong to take profit' The position was probably still safe. However I don't want to watch the stock continue on down and pretty soon I would be wondering, why oh why didn't I follow my gut instincts and close it. As I mention in my book, when you start getting the feeling of 'what's going on here?' It is usually time to close the position.
So for now I am pretty much sitting on the sidelines trying to wait out the week ahead of us. A lot of news coming this week so I recommend if you plan on opening new positions use the utmost caution. I could be really good or so-so or really ugly. When I have no real feeling on the direction or things..I try to step back and wait!
Good trading all