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.











Friday, October 28, 2011

Which one..Calendar spreads, vert put spreads or naked puts??

HI all. Well a lot of chatter regarding the different kinds of plays while using options. For me I have pretty much rotated into calendar spreads. If you are not familiar with them, do some reading, they are easy once you get to know them. Also I hesitate to say this but it is hard to lose money with them. CaCa can happen but if it happens to calendar spreads the rest of the options market is in really bad shape.
But again there is nothing wrong with plain vanilla vert put spreads. They seem to give a pretty easy 1-3% a week. Naked Puts can usually match that but both have a potential downside. With calendar call spreads all the maint. needed is known up front. Each week or month should produce some profit . I only use weekly options but at times I might roll out two weeks to get some higher strike. Other than a major drop in the underlying stock, a continual problem with calendar spreads is the stock moves higher. This is both a curse and a blessing. Its true that it make it difficult to get decent prem’s at the same strike but and excuse the put ..A BIG BUTT, is that the bought call for Jan or ?? is going up and one day you get to sell that one.
EX; a stock is trading around 89, you buy a ‘leap’ for a year out at the 87.50 strike and sell this weeks 90 strike. All is well and then the stock starts moving up. You suffer through lower prems (but all positive) and in a year the stock has moved to 99. Well at that time you get to sell that bought call for over 10 when it might have cost you 5 or? Plus each week or month you made money. I am not saying these are for all traders as it takes some getting used to but for me it seems the easiest way to make money that I have found in the options market.

Sunday, October 23, 2011

Earnings winding down

Quite a few of the major companies have reported and generally they confirm that earnings are still getting better. I still expect the fall season to be pretty good and a good Christmas season.
A heads up regarding the options business.
Don’t forget that you have to run your option trading as a business.
If your stock is dropping, it is probably not a good stock to use.
If analyst are downgrading your stock, it is probably not a good stock to use.
If your returns are too good, your strike is probably not a good one to use.
Be alert to the warning signs and trade smart.
I have open calendar spreads in the following stocks
MSFT, MCD, AAPL & KO. These spreads give a good return each week. Take a look and see if they work for you. Good luck

Tuesday, October 18, 2011

Earnings tonight

Well AAPL reports tonight and later this week MCD & MSFT report. It will interesting to see how the stocks respond. Especially AAPL, as expectations are so high. If they drop in after hours, it will probably be only for a day or so as the numbers will be massive.
Like the drop when the 4S was announced, big drop for a while and then roaring back.
My positions at this time are all calendar spreads;
AAPL- 1/2013—400 and 10-22—405 (will probably need rolling into next weeks 405’s)
1/2013 – 380 10-22--385 “ “
1/2013 –395 10-22—400
MCD 1-2013—87.5 10-22---90
MSFT 1-2013---25 10-22- some 26’S / some 27’S and lots of 29’S
Those are my only options at this time. So now it is sit back and wait for a few days. These plays average around 4-5% for a week.so there is money to be made out there but use caution and nothing wrong with waiting until Wednesday or Thursday to make trades.

Wednesday, October 12, 2011

Some calendar plays

Hi all, some great plays and ideas floating around. You guys all seem to ‘get-it’. Safety and good positions can equal some great profits and minimize the risk.
AAPL seem pretty determined to make a run towards its earnings announcement on the 18th. The new 4-S phone is flying off the shelf as usual and later the newer I-pad. So good things coming with them.
I still like the MSFT calendar trade. Make about the same as AAPL without as much volatility. I am buying the Jan 2013 and selling the Oct-22nd at the strike of 27. My plan is to sell each week for around .20 or more. That is times 60 weeks. If that works it will be around 300% ann ROI.
I have been asked what to do if the stock jumps past your sold strike with a calendar spread. If doing weekly options with the stock, here is what has worked for me. First, I am in no hurry to jump to the next strike. Stocks do go up and down so don’t be too anxious to jump up. Second, if moving up one strike a perfect time is the week before the monthly expires. This is that week, so before you would have sold this week’s option you can jump ahead two weeks and get a decent premium. This saves you from having to jump all the way into next month. It doesn’t all ways work but it is the first thing I check when thinking about rolling up one strike.
Keep all the good trades posted so other can continue to learn and find new positions to evaluate.

Sunday, October 2, 2011

October is here

Hi all, Well Sept is normally worst month of the year. Most fear Oct but it is September over the years that bites the hardest.
I have lots of AAPL, some puts and a lot of calendar spreads with calls. Assuming the world does not collapse, I am expecting good things as AAPL approaches earnings. Lots of news coming from different companies during the next few weeks, so watch your step. I am not as comfortable as some or you are with the index positions. I want to find a one-off item I can look up and feel good about. To many iffy ones in the spx etc.
What are you guys playing out there? Any good puts or spreads?