A lot of talk regarding CMG. I looked around and decide I like it also. Sold the 180 strike with CMG trading around 239. That is nearly 60 points of cush and you can still get over 3%. The spread is pretty wide at .60 x .80 but you can probably get in around .65 or maybe .70.
My plan on a play like this is to let it ride for a week or two and then roll into a higher strike. If CMG stays near it present price i would only roll up to the 190 at most but then in another week in the 200 etc. Never get to anxious and roll to fast. Nearly all my losses come from rolling to high and to soon. Think tortoise rather than rabbit.
Jerry
8 comments:
awesome trade. i sold at .85 yesterday and im up 20 cents today. i will be rolling up slowly as well. please keep me posted when you look to roll up. thanks
Hi Jerry - just found your blog today - wish I would have yesterday. :) I missed out on the CMG trade today. This stock does look good for a swing north.
Jerry,
Thank you SO MUCH for writing your book and sharing you ideas. You've given me that extra edge (and basic risk aversion strategy) I've been looking for. I've been successfully writing OutOfMoney Puts for 2 years ... but for whatever reason, I had not previously considered ROI with respect to Maintenance Margin until your book -- when I read/digested that concept, it was like "WOW - THAT's IT." I really like being able to write a higher number of SAFER 20%+ cushion puts versus the less cushion higher premium trades I had been writing. I'm now feeling more like the Casino House than the Gambler. CRUMBS is the perfect name. My advice to all Put Writers out there is to start each trading day by first re-reading & focusing on Jerry's 12 Basic Crumb Rules.
Well thanks John. I guess I now have to put you in my will...lol.
Writing the book was a work of passion for me. Having lost a lot of money in the beginning I was hoping to save others from suffering through what my family and I went through. You might notice the tendency of me to repeat my warnings of using lots of cushion etc. There are lots of books on the market regarding various styles of trading options but few if any seem to give out guidelines on how to just poke along and make money. Most seem to be telling you how to invest and makes tons of money. I just want the average player to have a way to, as safe as possible, make some income and help their families to possibly better life. Money doesn't guarantee a good life buy if you keep all things in perspective, helping your kids or G'kids go to college etc is a great feeling.
Keep trading safe.
Jerry
Spiritually speaking, you have been blessed and have shared your blessing. Give more, get more to give more. This is a gift that we should all use wisely. We need to all remember to give, and share the fruits...especially this time of year...peace.
Thanks again Jerry.
Most sincerely...
Here's a result of an after hours PowerOption Screen - some ideas to consider:
TICKER STK PRICE MONTH STRIKE BID PRICE ROI ProbExp %Cushion $Cushion Analysts Target
CSTR 61.04 JAN 49 0.25 4.9% 95.8% -19.7% $12.04 $67
RCL 42.41 JAN 34 0.18 5.0% 97.4% -19.8% $8.41 $47
ANF 57.11 JAN 46 0.22 4.6% 96.8% -19.5% $11.11 $54
TCK 57.66 JAN 44 0.20 4.3% 99.4% -23.7% $13.66 $51
WLT 118.62 JAN 95 0.48 4.8% 95.8% -19.9% $23.62 $107
CMG 238.02 JAN 185 0.85 4.4% 98.9% -22.3% $53.02 $202
I've been looking at BIDU -- Let me start with an initial warning, it has had a very ugly pullback (from a recent high of 115 on Nov 11) but still in a long term uptrend...that being said, here are the basics:
BIDU Closed at 98.74 last Friday
BIDU JAN 75 bid was .36 (4.5% return on maint margin)
BIDU JAN 75 provides over 23 pts of cushion (24% below price)
BIDU earnings are in Feb 2011
BIDU analysts consensus estimate is 122
(using http://www.nasdaq.com/earnings/analyst_summary.asp?symbol=BIDU&selected=BIDU)
BIDU possibly in oversold condition (???)
Lastly, in Friday's MadMoney Lightning Round, Jim Cramer said "I like the pullback. I believe in Baidu. I think it's got a great business. People don't like the chart. They say the chart is bad, but I think the business is good. Buy Baidu."
Thoughts on BIDU?
Hi John, BIDU has certainly came a long way this year. Back in July (i think) it split 10-1 Back in Jan it was 420 or 42 in today's mkt. So more than a double in a year. But it certainly has a great business. I use it with caution and lots of cushion.
There are lots of good plays coming our way, but do use caution and go for smaller results. We can always roll up in two or three weeks.The VIX is low, the mkt is high etc. When the last of the non-believers finally jump in to get on board a rally, the rally is usually over!
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