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.











Sunday, June 24, 2012

Home again

Hey, I'm home and had a good time and ready to get back into trading. Ihaveo's, your post of 6/21 @ 1:12 was correct. There is no 'sure' way to trade options. But turning the odds in your favor is the best way to make money that I have found. Regarding some confusion of DITM options. (deep in the money options) The plan is to buy a low strike far enough out and sell a near term option a little below the current stock price. As you roll up, if the stock goes up, you create a difference between the bought and the sold option. In two of the acc’t I manage, the bought is now the Jan 2013, 535 strike. So assuming AAPL continues upward somewhat towards earnings I will be rolling up 5-10 points a week or even having to jump into the next month. I will continue to roll up and out and get a bigger and bigger spread between the two strikes. Come Jan I want to close all and if the stock is at 700? I can sell the 535 for 165 points. Let’s assume that I have only been able to roll into the 650 strike for the sold one. I will have to buy it back for 50 points. That means that at that time I will receive 115 points of credit. That does not take into account each credit I received when rolling. If AAPL only goes to 620 by Jan then I will get 85 points of credit and also have the credit of the roll ups. As Ihaveo’s mentioned AAPL (or any stock) does not always go up. So if one set of these expire without rolling then you get to keep the credits and start over. I see I missed an interesting week FOMC, Greek and Egypt elections. So let’s get back into trading and see where we go from here. Some great post and questions. I hope all are learning and enjoying as much as I am. I thank all that try to help other others and either explain or de-mystify options. Jerry

Saturday, June 16, 2012

HI all. It is Saturday evening and one last post and answer part. --LOV; I use long and the longer the better. You are saying shorter term than I like. City; You are correct, the real value comes when you are able to let all expire. Of the accounts i trade, many look somewhat natural until finally they expire and bingo big money. ihaveo's; there are different situations but when the TV gets to 1.5 or 2 i start thinking of rolling. If the option is out of the money I will let it run, if in the money i start thinking of rolling. There is probably questions I have not answered but other have or tried to help. But to sum it up i want to have a call option that is ITM and around 10 pts ITM (in the money) Keep doing that until the stock takes a breather and all expire worthless and you finally collect the money. Tomorrow I will be off the grid and catching nice rainbows with my flyrod. You guys are in charge and keep the market under control. It will be a week before i even see the Greek results.

Saturday, June 9, 2012

A different idea on trading

Hi all, here is an idea for a slightly different way to trade on a vertical spread. I am using AAPL as it has seemed to have bottomed out and it also has great premiums. This is on the same idea of trading in the money covered calls. With AAPL trading around 581, I am looking at buying Jan 2014 570 strike for $111, and selling the June 16th 570, for 14.25 This is of course 3.25 of time value. The idea is if AAPL keeps going up I will continue to sell the 570 for the next two weeks and with two weeks left in the July cycle I will roll up 5 points and go out to the July 21 and take another credit. If aapl has not gone up much I might continue to sell the 570 strike for the next week without going out to the next two weeks. So the idea is to stick with the strike you have even if the stock is going up some and when you reach the point where there is two weeks left in the next period, jump to that option and roll up 5 points. By using Jan of 2014 you have approximately 77 weeks of taking in 2 or 3 points of credit when rolling. In a perfect world AAPL will be around 700 in a year and a half. If so your 2014- 570 would be worth 130 for a net gain of 19. And if you were lucky enough to make 2.5 points a week for 77 weeks it would be a gain of 192 points of pure profit on the calls sold. You would also make around 33 points of profit on the original bought call of the 570. This would be a net gain of 192+33 = 225. This could mean a ROI over 200% in a year and a half. A lot of if’s but something to consider. I am going to do it with maybe 20 positions. I will keep you posted on the ROI.

Saturday, June 2, 2012

Well this was the week from hell for the market. My trades went fine as I look for little profit and lots of cushion. I hope all of you have had the same good luck. The difference between us (cushion addicts) and the rest of investors, especially option investors is that we go for consistent lower returns. We expose ourselves to little time and we leave lots of cushion. It is that easy to make 1-2% a week. After 5 months the DOW is about even and the S&P also. Friends, it is that easy to beat the market. But it takes discipline and a plan. Step by step and profit by small profit you can beat the market. I enjoy all the contributions by you guys. It is fun for me to see new ways to trade these options. There are so many ways but most successful ways limit time and add cushion. Good luck all Jerry