HI all, I'm home from my road trip. I've been looking for some put plays for the remainder of the Feb ex. These are just ones that look pretty good after a quick look at the situation. They are not in any order and they are not recommendations. Just ideas for you to check out and see if they meet your safety scanner. I'm rounding off some of the numbers but they are close. Also these may not still be available on Monday
NFLX trading near 220 sell the 190 .47 return % of 2.2
AAPL 345 325 .74 1.4
CRM 138 115 .22 1.3
CTXS 66.5 55 .10 1.7
ISRG 337 300 .50 1.5
LULU 77 60 .10 1.5
POT 181.4 165 .42 1.9
FFIV 123.6 110 .25 1.8
SHLD 83.7 70 .17 2.
This shows that there are still some decent plays out there. There is only two weeks left in this period, that is a plus but be careful with the world events going on.
Remember, if you don't see a play that you're comfortable with --then don't open a position. Of course the same is true for positions you now have. If things are not going in the right direction, close 'em.
Enjoy the super bowl and - Good Trading
32 comments:
Who OFFERS 10% margin on the naked puts. Tradeking only offers 20% for me
ThinkOrSwim offers 10% margin on strike + premium. Same formula as in Jerry's book.
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bloguser; look at the web page below that tells when the 20% or the 10% rule is used. Most brokerages follow these guidelines. It is also a page where you can tell how much maint is needed for a position. An interesting site.
http://www.cboe.com/tradtool/mCalc/default.aspx
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On my recent trip I gave some talks regarding options, the questions were the same as always. I have no motive other than maybe sell a few books, but mainly to expose people to a different way of trading. Many are retired and have never done anything like this. I enjoy these potential traders as i can put myself in their shoes 15 years ago. The standard question is.. If this works so well why doesn't everyone do it. I have heard this a million times at least. I can talk about all the standard cliche's, but generally i shrug my shoulders. Beats me.. Just not exposed to this style.
I have had people stand up and say "a friend of my brother in-law, lost all his life saving with options.." "With options," is a standard catch-all for any type of options. So I usually ask nicely what way were they trading and the answer is nearly always..'Just with options". I try the best I can to tell them of my style and how I also lost a lot just trading blindly and how I have tried to minimize the dangers. You can really see a difference in an audience of younger traders and older ones. As it should be, as seniors need to guard their resources. But young traders are on the edge of the seat and older ones are sitting with a scowl. But fun times and maybe some converts in the group.
Have any of you tried to explain put selling to fiends? Usually some funny looks.
I have had good friends tell me that either I lie or have been real lucky.. There is no way to make money with options!! Only the BIG boys make money that way..etc ..lol
Enjoy the super bowl and enjoy the people you are with. Smile at a stranger and wink at your special person. Tomorrow is my 46th annversery. I fooled her as she was only 18 and I was a dashing soldier. Where did the years go?
Jerry
Jerry,
Glad you're home safe and happy anniversary. I occasionally run across someone with a "My friend's brother-in-law lost everything" story and the first thing I ask them is "Was he an option buyer or an option seller?" No one can ever answer that question. Most people who even know what an option is equate the word with dangerous. It's simple ignorance. And, most investment gurus are no help either. One of the very first books I read (Motley Fool) had exactly one paragraph about options and it was in a chapter at the end of the book that also talked about other ways to lose your money like day trading, penny stocks, the lottery, and gambling in Vegas. So, it's no wonder that 99.9% of the population is either uninformed or misinformed when it comes to options.
Hi Jerry: Happy anniversary,& I think you might of given your wifes age away! Hope it works out for ya.
Hi Jerry:
I think option sellers like us should have a secret handshake or small tattoo so like-minded individuals could identify each other. I've found it futile to explain to people what we do. They:
- stop paying attention after a couple minutes
- roll their eyes and think you are lying
- are flabbergasted that, "You will put that many dollars at risk for those small rewards?!!"
So in my part of the world (Alberta, Canada) we discuss small cap oil and gas stocks, oil service companies, and maybe gold and miners.
I only discuss option selling on blogs like this. That's why Jerry, and a few other bloggers, providing these forums is so important.
In trading, we have to determine where we fit in -- buy and hold stocks, day trader, scalp long options, etc. I've been successful with swing trading but decided that options had a place. Floundered around until read couple books on option selling. Finally found where I fit in! If anyone here hasn't read Jerry's book, do it. Very straight forward and focused on only one thing. That's the beauty of it.
I've got to add my thanks, Jerry, for the book, the blog, and the sharing of options choices. You're one of the most generous guys in the world with an interest in these kinds of trades. I hadn't looked at options this way before finding your posts on TradeKing.
Does anyone else have concerns about AAPL with regard to Jobs' health? Being a realist I ask myself what happens if Jobs dies? I've got a put spread on AAPL at the moment but am keeping a close eye on the news. Probably won't extend it until I know a bit more.
Hi guys and dolls, Gee, thanks for all the good words..Do i owe any of you money?..lol
Hmmpton, I have some apple stock that i use for covered calls when i can not find a put that i like. So I am also aware of the S. Jobs association to the price of AAPL. I certainly would hate to see anything happen to Mr Jobs. I do think the world is getting used to his eventual withdrawal from AAPL. So if anything did happen, I would look at it as a buying opportunity. Give it a few days to settle down and then start selling puts or buying the stock or both. His previous leave of ab. was some of AAPL's most advancement in products. So who knows? I do expect to see a stock split at some point. With puts and AAPL i do crowd the 20% rule as it is probably the only stock I would accept being put to.
As most of you know there is a common thought by many put sellers that they only use stocks that they would not mind owning. They usually sell strikes different than I would for that reason. But my feelings are I don't want to own a stock that is falling (especially to the strike level that I use) So that is my apple idea. I hope it helps.
An idea some of you might use is what i do with my stock ownership. I give the four G'kids a share for all the special days..B'days, Christmas etc. The older one (11) is really into it. He enjoys watching the acc't grow and has learned about dividends and pe's etc. So i use the stock for both CC's and to build little capitalist, one at a time..
Information about POT
Potash Corporation of Saskatchewan (POT: TSX/NYSE) begins trading on a 3-for-1 split basis on the TSX on Monday, February 14, 2011 and on the NYSE on Friday, February 25, 2011.
In preparation for the stock split, all open Canadian equity and option orders for Potash Corporation of Saskatchewan (POT: TSX) will be cancelled after market close on Friday February 11, 2011. Please do not place orders for Potash Corporation of Saskatchewan (POT: TSX) or its options on the Canadian market with a “Good 'til” date beyond Friday February 11, 2011, as all open Canadian orders beyond this date will be cancelled prior to 9:00 a.m ET on Monday February 14, 2011.
Hi Jerry,Happy anniversary!
Sammy
i completly agree with hampton.Jerry is an incredibly generous person who has shared his trading secret for basically nothing.No one shares their secret of trading as jerry has done,they will tell the trades but not the methods they use to find stock.I used to do credit spreads and never tried puts as the risk of one trade wiping your profits was too much for me.But after reading his book and his key method of 20% cushion ,i have started selling puts.Someone asked jerry about starting his own hedge fund in this forum,i am curious what he thinks about it.
"Happy Annversary" to you and your wife, Jerry and I wish you both many, many more.
Tradewin-1
P.S. Enjoyed reading your book.
Jerry,
Belated Happy 46th Anniversary.
I always remember what I read years ago ...Life is like a toilet roll; as it gets used up, it rotates faster....I thought it's well described.
May you make new sweet memory each day.
Hannah
Jerry,
Happy Anniversary. And welcome back.
Sold 20 CRM 115 today for .18 @ 1.4%
Ed
I all, I just put in a trade for LULU. They are a buy recommendation by all the analyst. They are trading around 78. I used the 65 strike. I put the order in for .15 The maint will be 6.7 This equals a tad over 2% The cush is only 17% but with a little over 9 trading days and such good buy recommendations plus earn's out of the way, i like it. If the trade does not go through within an hour i will drop my ask to .10 This makes a return of around 1.3%
Howdy folks,
I originally addressed this question to Jerry, but I'm kinda tickled by this idea and wanna know all your thoughts on this. Since we have a reasonable idea of long and short selling and option strategies, what do you all think of the potential of starting one's own private hedge fund? What kind of capital outlay does this require? I was inspired by this idea after seeing one of CNBC's fast money hosts Karen Finerman. I read her bio and learnt that she started her own hedge fund when she was 27 when her net worth was only $1000. She's now 42 and manages over $400 million and she herself is worth a $100 million!! Any thoughts, ideas,.....feel free to throw them out here!!
Happy belated anniversary! Hope you had a good one.
Still just holding some FCX 45 and will to expiration probably; as Jerry, you have said, "Don't close out a position if there isn't a better place to be"; the FCX 2:1 stock split kind of sucks; I'd rather work with a $110 stock than a $55 one. Looking for another copper/gold/silver play. Been looking at AEM but doesn't give me the warm and fuzzy feeling though.
KJ, interesting idea. I now manage some other peoples money. Nothing official, but it is a real weight. I enjoy it but wow, when others let you risk their money...whew, pressure.
But The legal part and official business forms and etc etc. But it could be done? I have a friend that might know some of the legalities. There are probably a million hoops to jump through? It is worth looking into.
Jerry
Gary, I know you commented on flash crash results and with market having made such a great run lately and just curious how AAPL actually did on flash crash i used ThinkOrSwim ThinkonDemand......so on April 19th(near beginning of new monthly options cycle) i sold 10 AAPL 195 puts for $0.33 when AAPL was at $247 and then fast forwarded it to flash crash day May 6th....APPL was 255 that morning and options were down to $0.11 cents(so up $255 on the 10 contracts)......at flash crash with the VIX spike caused huge jump in puts premium. The low on APPL that day was $199.50(so it dropped 21%) and at the the puts went from $0.11 to $2.55 and the $255 gain turned to a $2275 loss intraday. Even when AAPL bounced 30points right away to $230 the puts stayed up at those premiums because the VIX kept rising/fear...By the end of the day that ($2275) loss ended up only being (-$155). A stop loss at 2x the initial credit would have worked that morning way before the big meltdown. Anyways just something to think about
trading pot 184.11 strike 165 .22 feb exp 1.3%
Fish, keep an eye on POT as noted, it has a split coming and, unusually, it come early in Canada.
I'm not sure if I have ever heard of that? How it will effect U.S. traders? I have used POT for years but I avoid these stocks when unusual things like splits, earnings, drug eval's etc. Just the unknown scares me.
well great. i had no idea and my order is already filled. this market is really frustrating. thanks for heads up.
POT trades split Feb 25
http://www.briefing.com/GeneralContent/Active/ArticlePopup/ArticlePopup.aspx?SiteName=InvestorPopUp&ArticleId=SP20110127082319
Anyone considering playing CSCO around its earnings? I like the FEB 19 and 20 puts. I would possible roll up to 21 if it breaks out on a good earnings report.
KJ, Just my opinion but one of my firmest rules is to never guess on earnings. When correct you are a genius, when wrong you might get really bad news. So use caution and be aware of the risk. One of the biggest risk is that the stock GAPS down and blows right by any stop or time for you to make a defensive move.
Jerry
Opened a small position in OPEN the FEB 70 strike; 16.25% cushion for 2.6% return; earnings last night, better than analyst estimates.
Hey newport...
I joined you with a position in OPEN FEB70.
Nice cushion & yield with less than 10 DTE.
Thanks for mentioning it.
Ed
Hey Ed - you're welcome :)
Jerry,
Since you've been doing this crumbs trading method for quite awhile now...sticking to your stop loss method and 20% selection criteria are you averaging 2-4% monthly every month? and what have been your annual average returns over the years been?
I've started adding this into my option selling, and I like the steady income factor.
Thank you for sharing Jerry and company..interesting ideas floating around
Nolan
Also
-When numbers are compounded monthly instead of annually makes a big difference in overall annual returns. If you can average 3-4% a month you can make 50-60% in a year which is phenomenal!!
I'm excited to try my first full year doing this method with part of my account.
Cheers
well gary i fell better that the split on pot is after feb expiration. thanks for all the help
well hell i cant even spell right
I was betting CSCO would break out after its earnings but it took a dive again this quarter. I hope it stays above 20 strike at expiraton next week :)
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