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, December 30, 2011

Vacation time (sort-of)

You guys will be flying pretty much without me after Monday night. My wife and I are going to the Caribbean for 25 days. 10 days in ARUBA 7 in Curacao and 7 more in Bonaire. Some diving, snorkeling and fishing. Options bought this vacation for us so I want to thank all the traders on the other side.. I will have my lap-top to do some trading and checking on the blog. Take care and leave cushion…

Saturday, December 24, 2011

Merry Christmas to all ...

A very Merry Christmas and a Happy and prosperous New Years to all the Bloggers and option traders out there..

Friday, December 16, 2011

A wild week

Hi all, what a week, up and down in the hundreds. This Europe really has me somewhat worried. Places like Ireland and more, are paying more out each month than they are bringing in. This has to end in an ugly drop one day. I am still fully invested but in quality stocks. I avoid plays like trying to outguess RIMM or other stocks that have fallen pretty far and the temptation is to think that it can't fall more...IT CAN. Don't try to catch a falling knife. In this market my advice is to stick to quality and proven plays. I also avoid 'hot' stocks such as Panera bread and that bunch. There is plenty of money to be made and without as much risk. Many of these stocks will turn into super plays one day but not for me. I've been on the express train both north and south bound. North is much better.
Stocks like XOM, MSFT, ORCL, MCD and KO to name a few. They all offer weekly options with decent premiums. I also have a lot of CLF.
It might be a good time to do some vertical put spreads. Plenty of weekly plays that offer 1+% for a week. Compounded that is around 67% annual ROI.
Some good advice has been offered by other contributors. If you are new to options or are just getting a feel for them read all the post by our gang. Everyone here wants all of us to be successful. This is some of the best advice that is both free and available to all. Again, in a market which it can be up or down 300-400 points in a day.. leave lots of cushion and settle for less. The tortoise can win the race and have a smile on his face.

Thursday, December 1, 2011

Rolling up a calendar spread

A common question is where and to what strike to roll to if the stock has made a move north in a calendar spread. The deciding factor on which strike is, which one makes the most $$. To consider---
If you can roll to the same strike you get more return. But I don't want the stock to run away from me, so it is kind of a guess on where to roll to. If the stock is generating more and more up pressure i will go to the next strike and maybe out a week or month?
It is important to remember that rolling up for a stock that has moved up even if a neutral roll, is not all bad as you get the new intrinsic value.
EX; you have sold the 25 strike and the stock has moved to 27. To buy-to-close the 25 might cost you 2.10 and the next month’s 27.50 sells for 1.50. On paper you have lost .60 to roll up and out. But remember that you now have gained 2 of intrinsic value and also the bought call has gone up in price..(there will come a day when you want to sell that one)
So on paper two things have happened.
1. you lost .60 on each contract
2. you have gained 2 of intrinsic val in the sold one.
The one danger is that all of a sudden the stock drops back to 25 and then the .60 you lost is really lost..lol That is why it is a balancing act of when to roll and how far. Intuition, experience and gut feeling is the answer. Oh yeah a crystal ball helps.