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.











Thursday, July 19, 2012

An easy 80% in 6 months

Hi all, I had a friend that is interested in options but doesn’t have the time necessary at this point to do full time trading. He asked me if there was a simple trade that should make good profit. I looked around and decided to show him a trade that I now have and that will work for full time traders or new traders that want a profit yet not trade every week. This is simple and only requires one thing to happen. By January 2013 AAPL needs to be over 600 and over 630 for full profit. I see no problem with that part as AAPL might be over 630 this month. So the trade is to -- B2O (buy to open) a Jan 2013 AAPL call at the strike of 565. This will cost you today 80.90 S2O a Jan 2013 AAPL call at the 630 strike. You will receive 45.60. You now have a net debit of 35.3 If AAPL is over 630 at expiration date you close both side right before expiration and the result is a profit of 65 difference between strikes minus 35.3 = net gain of 29.7. As the set up cost you 35.3, it is 29.7 / 35.3 = 84% ROI in 6 months. This is about the easiest way to make over 80% in 6 months that I know of. Your break-even point is if AAPL is over 600 at closing time.

Thursday, July 5, 2012

Hi all, I have been pretty busy with several projects so not enough time to post or keep up with all the comments and finally did today. Regarding this AAPL run, wow it sure makes it hard to continue on the path I was hoping for. First, Artelly; please write again. Don’t know how I missed your request. Now on to the ITM spreads. Well as probably most of you know even though you started with a ITM spread you now probably have a Deep In The Money spread. One day away from the ability to trade and now today I found myself way behind the curve. Here is what I did. I had several different long sides but most were 565 Jan 2013 and this July 20 575. Yikes already 35 points behind the stock. First there are two main ways to make money with this method and of course you can mix and match when that is appropriate. At the end of this I will tell you of what I have done today. One goal is to make weekly money by selling the strike that keeps you around 10 points below the current stock price. If the stock moves then you sell the next higher strike. If it moves even more you might have to roll out to the next month and pick up some credit as well as a strike or two. The other way to win is to get a bigger and bigger spread between the long side and the short side. This has the down side of not really building the account while doing it, but the profits are deferred until closing. EX; you have the aapl 550 and you keep rolling out to the next month and getting 10 points more. You might have to do this without taking in $$ when doing this roll. So you opened this on June 1 and had the Jan 550 and had sold the June 565 and each month you had to roll out to the next month and made no money while rolling, but you did pick up 10 points or more each month. So by Jan you had rolled up 10 points per month for a total of 70 more points. So now you could have the Jan 635 sold and the Jan 550 bought and it all expires. You now get the full distance between the two strikes for a total of 85 points so now if you 10 of them it would be worth 85,000. During some of those months the stock probably didn’t go up and you caught up some and just rolled out to the same strike for a decent credit. That of course would be mixing the two objectives. So you can make profits rolling to the next month or just taking a credit weekly / monthly. Now what I did was a little different. Today I rolled all of my current shorts July 575’s) into the Jan 630. I picked up for an 8.50 in credit and I also picked up 65 points of spread between my 565’s and the 630’s. What I accomplished was two-fold. I now have a big spread between the two strikes and I used the new credit to open some more spreads and this time I went to the 600 Jan 2014 and sold the July 6 – 615’s. (when I did this AAPL was trading at 614..) with these I have around 76 weeks to either roll up or up and out. I will sit on the old ones that have the two Jan expirations and just collect the difference at closing time. If AAPL should fall back on bad earns etc. I might close the short Jan 630’s and open a lower strike and collect the lost TV of the old 630.. But that is just a thought hanging out these if AAPL drops. I hope all are adjusting to the different plays with AAPL as it is sure moving towards earnings. Moving this fast has certainly makes one do some deep thinking and scrambling.