Hi all, while waiting for the last of the Feb's to expire i have started looking towards the next set of plays. If any appeal to you double check my numbers and the other filters. This list is by no means the 'end-all' list. Just the ones that I check first. You guys keep on finding good ones and posting them.
But here is a quick list of ones that I will do or reevaluate on Monday morn. No special order and I don't have any weeklys that i like yet.
CLF AT 100 -- 80 STRIKE --.25 =3%
CMG 266.5 -- 210 -- .60 = 2.75
CRM 142.2 -- 105 -- .42 = 3.7
LULU 83.3 -- 65 -- .2 = 3%
NFLX 138 -- 190 -- .90 = 4.5
OPEN 92.5 -- 70 -- .35 = 4.7%
MOS 86.3 -- 70 -- .23 = 3%
PCLN 459.2 -- 365 -- 1.7 = 4.3%
RCL 47.2 -- 37 -- .12 = 3%
TCK 57 -- 45 -- .18 = 3.8%
WLT 127 -- 100 -- .4 = 3.8%
So those are my prime suspects for the coming month. If you have a good one or two post them so we can all get some of the free money. Do be aware that the market has come a long ways and many suspect that a little pull back is due?
35 comments:
Jerry, Thanks for posting this. It is soooo much appreciated. As I do, do my checks but it is good to compare to what you are checking. That and I am super busy and it is difficult to sit down for 3 hrs to go through my entire list.
thanks again. I'll keep on eye out for John's postings too, as he finds some good ones sometimes like TCK in DEC.
Here's a nice short term play on AAPL, currently at 358.
AAPL Feb4 Weeklys 320 @ .37
ROI 1.1% in 8 days.
38 pts cushion (11%) for 8 days.
Annualized Return 50%
Yes John, it does look like a play I might look at. With Other traders (non-options traders) when we causally mention that I might get 50% ann returns and with a pretty good deal of safety, they start looking around to see where you left the strait jacket...lol. There are certainly a lot of ways to skin an option (mixing metaphors) but of course our way is the best...lol
Jerry
Hi,
This is my first post. I use spreads since my funds are in a Roth IRA. Most stocks look scary to me as they are mostly way over bought. That said, I don't think AAPL can get to 320 by next Friday. I plan to wait a couple of days for a possible pull back before I get back in.
Thanks,
Dave
Guys have you tried selling Puts on the following:
BAC MAR 14
YHOO MAR 16, 17
CSCO MAR 18
NG MAR 14
MGM MAR 15
Hi KJ - I have not; they all are well below the $50 minimum stock price for 'crumb' consideration.
I like RCL because it is not terribly overbought like most of the rest of the suggestions so far. Of course, there could be a reason for this.
Dave
Just read my post, and it sounded rude to me. The "overbought" stocks could be simply breaking out to new highs.
Dave
Dave - I agree that so many high quality stocks, per the oscillators, are over bought and are keeping me on the sidelines right now. I'm looking at FCX & WLT for possible put sells at day's end at this time. There's always time to pick up some other companies if there is a dip over the next two weeks, IMHO.
Those are more within my comfort zone, I don't like to chase stocks up, even in this bull market.
16$B went into mutual funds last month, the biggest increase since 2006, according to morning star. That kind of money flow is fueling the stock market.
HI all, KJ, we certainly respect your choices and if they work for you.. perfect. When other traders say your stocks are scary it is for several reason.
#1 is when you use a strike price very close to the existing stock price it leaves little 'wiggle' room for the stock to move.
2. The stock might well be heading north and making your puts look good. But, world events, goofy lawsuits, terrorist activity, Scandal with management etc can effect even good stock. The power of options are great when you are winning but can be ugly quickly when they turn against you.. You suggested MGM it is already in the money (ITM) You now have a month to go and the options now have intrinsic and extrinsic value. It just starts multiplying. Why I recommend, as Newport says, the 50 dollar starting point is that is a threshold where you can get decent premiums and yet use a strike price far enough away that it offers some safety. Of course 50 is just an arbitrary point and sometimes we go a little below it. A lot of traders especially newer ones think that lower priced stocks offer bigger returns as you can do so many. Not true. One Apple put might make more than 50 BAC puts. The key is percentage of profit for the maintenance that is used. This is just a forum for all to tell of positions they like and are using so don't hesitate to tell us of your traders.
CLF given the earnings greed is pulling me to the 85 put .60
STO 73.38 strike 57.50 Mar .35
Good Trading
CLF
I should add I only do spreads so I'm also long Mar. 75 puts .12
Sammy double check your ticker. I see STO trading at 24.61.
Ed
I dumped VECO. I didn't like the recent news. Not going to gamble.
Sorry! STO Mean Selling to open
I sell put on APKT 73.38 Strike price 57.50 March put @ .35
Jerry, thanks for the input. All the "scary" stocks that I've above mentioned are the ones I don't actually mind owning if they are put on to me. I infer this from strong fundamentals of the company and a consistent short term uptrend in their charts. Of course, exceptions like recent sell-offs as we saw with CSCO are just a temporary overreaction to inflated earnings expectations by wall street, and these will soon recover as investor's short term memory of the earnings disappointment fades over the next few weeks. The problem i see with some high priced and wildly popular stocks like AAPL and NFLX, etc. is that any let down in their short or long term outlook (aside from earnings) can cause these stocks to plummet several points, raising their implied volatility and therefore a spike in the premiums, which further eats into your margin maintenance requirement. Of course there are exceptions and puts will have to be sold on a case by case basis. On the other hand, some of the lower priced larger caps that I've mentioned above actually have lower implied volatilities and hence smaller price fluctuations and are less prone to premium spikes.
Hi
Here is my current "spread" stuff
1) AAPL - i was going to do something here but the price action is troubling, my "gut" tells me steve J may be more ill than we think so as you preach if you do not feel right about a trade i pass.
I made some trades ahead of time (I double checked the filers) since Monday I am travelling
1) PCLN - Sell 365 Buy 355 for 0.60
2) NFLX - Sell 190 Buy 180 for 0.40
3) CRM - Sell 110 Buy 100 for 0.40
DECK looked good but has earnings on Feb 24th.
Regards
RHM
John, I like the thinking. As I said in the book, when your gut is telling you something is not right here...It is usually time to pull the trigger. Often you are wrong but compared to the alternative it is the safer move.
Gary, I also like CLF and even though the earns were great, I will avoid the [strike price creep]
You can always roll up at a later time if the stock goes correctly. Sometimes the earns are super and then after a few days the stocks slides as many traders were playing the 'good report' game and now taking profits.
My pick for this month (March)
OPEN - 91.44 - 70 - .35 - 5%
This is the first time I have used OPEN. It passes all filters and Jerry has listed it as a target stock for this month so I went with it.
Last month I collected .22 premium but it was a vertical. After commissions it ended up being .12. Man commissions is killer. I am hoping to keep these till they expire or get out with 0.05 buy back so ToS doesn't take commissions on that trade.
Rhmoptions
DECK?? Better check the earnings date on PCLN
Kind of a big one. Feb.23
@Fulgore,
You might benefit from writing a simple spreadsheet which calculates the premium/maintenance on naked puts vs. spreads. A quick comparison sometimes shows more than a percent (in a month) difference and it's not always the way you think it ought to be. I believe ToS does not use auth level tiers so you should be able to trade either spreads or puts.
Include commissions in your spreadsheet and it can be a real eye opener. I now have 2 accounts at different brokerages - one for puts and one for spreads.
@Gary Thanks!, DECK AND PCLN have earnings, mistake there (trading before morning coffee on the west coast is always a risk). I will be cautious now like i was with WLT, and may reverse the trade
Rob
RHMoption
PCLN off model but I bought March 450 puts today and sold Feb week4 440's 8.70 debit. Thought is if plcn goes down I make 1.20 if it goes up I can sell OTM puts for the next 3 weeks. It's a win or win biger!
AAPL Weeklys Feb4 310 @ .56
1.7% ROI
40 pts cushion (11%) for 1 week.
Since Monday is a trading Holiday, this premium probably won't be available on Tuesday -- but worth watching.
I just finished reading Jerry's book yesterday. It made me fire up again to try options trading one more time, after being wipe out completely 2 years ago.
I've a question for Jerry, can this 'selling put' system also be applied to sell options on ES (emini S&P 500 futures)?
RHMoptions
CRM has earnings on 24th feb.One of the top 5 stocks with heavy insider selling by ceo.
irwanto
hi irwanto,can u share with us the circumstances which resulted in the complete loss.Were u selling naked put or a victim of flash crash.Thanks for sharing with us so we can learn and become a better trader.Also recently i read a very good book on intra day trading "One good trade",would highly recommend it.
ali
Irwanto, I assume so but I have never done any? Most of the index's move slow enough that you have to be close with your strike and doing that interferes with with my sleep and my golf game..lol
Also you have to be really on top of all current events and market moving situations. I have had many contacts from those that use various index's but not me.
Jerry
@doctorali thanks. I must have seen march instead of feb for the earning dates for crm, pcln. Not sure what i was smoking today. Anyhow will need to be careful ad reverse if need be. Cheers
rhm
DoctorAli,
This happened at the end of 2008 when the market crash and I didn't put any safety on. What I did was mostly naked put, but the strike is about 10% from the price. This result was a lot of margin call.
Happy expiration Friday to all, my Feb puts expired worthless, TTM 25's, UYG 63's, I have March UYG 50's open with a 25pt+ cushion, the system I've come up with is make 1 big trade in the current month with a somewhat close strike price, once that gets executed then I go look at the next month and look for an over 20% cushion to pick up crumbs.
I am looking at the weeklies:
AAPL 330
BIDU 120
POT 165
RIMM 65
When you look at the probabilities based upon ATM Volatility, all have between a 97-99% chance of ending OTM. They have a 2-6% chance of touching the strike. Any comments would be appreciated.
Thank you,
Dave
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