Hi all, What a market. Glad to see the mkt up. It looks like my puts will expire tomorrow. Again I want to say that traders must be careful. Do not force trades. Leave lots of cushion and settle for less ROI. This is not a market that can be counted on to move somewhat predictable.
With the news from Japan not good and the mid-east is still a mess.
There are profits out their but care must to be used in picking your positions. Even waiting until there is only one or two weeks left in an option period is a valid strategy.
trade smart.
Jerry
67 comments:
My CLF 70 / 75 vertical will expire tomorrow for sure. not much ROI for a monthly but its better then nothing 1.8 %. I am taking a small hit on profit due to my low maintenance available to me. So i have to do a vertical.
also NFLX weekly expired last week for a 1.2% return too... crumbs crumbs .. crumbs
Jer, Hope you have a great time down south-enjoy life! NE is up to 70F today. Hooray
I know I know cushion & patient...
Jerry, you picked a great week to go on vacation! I hope you're having a blast down south. Two more days until expiration, hope the market stays firm *fingers cross*
If the market doesnt sell off tomorrow. Second successful trade in a month, even in this market lol. 20% cushion Crumbs... Thanks Jerry.
Hope you're having a great trip, Jerry!
Hi Jerry,
If you have a chance, can you respond to my e-mail questions regarding adjust your monthly option rules that you mentioned in your book to the weekly option rules?
Thanks,
Tom
Re: LO,
I was wrong, the meeting ends at 12:00 et, and the recommendations will be this morning, around 10:00 I think
Dave
LO is up 5% at the open, that's good.
It seems the premiums are decaying normally now. =)
Can anyone care to speculate on why most of the put option for Apple in the 330 to 320 range that will expire at today went sky rocketted for 1/2 hr during 10am to 10:30 today? My 320 AAPL put option went from .05 to .89 then back down to .05. That is huge jump when the stock itself is only moving down less than 1/2% from 334.7 to 333.5, just a little over 1 point in such a short period. I am looking to understand more about the reasons for option price fluctuation on the last day of trading.
Thanks.
tk...
SAN FRANCISCO (MarketWatch) -- Apple Inc. shares fell $1.36 to $333.18 Friday.
Late Thursday, technology research firm IHS iSuppli said that Apple could see
shortages in supplies for its iPad 2 devices due to the effects of the earthquake
in Japan. ISuppli said that several iPad 2 components, including its battery and
possibly the glass used for its display screen, are made in Japan.
Do you guys think Apple would be a good play for next week's option? I'm thinking about doing a 305/300 credit spread for a 2.5% ROI. A lot of people are saying to avoid technology due to the Japanese crisis, but I don't see Apple falling to those levels. Its 200 dmv is slightly above the 300.
APR list?? FFIV NFLX NKE CAT
I'm considering AAPL long for next week.
Re: AAPL,
Plus IV is up to the 49th percentile, so the options are comfortably expensive.
Dave
@Hannah - How'd your LO position turn out? I saw you mentioned you had sold the 85 calls, and 65 puts. Were you able to get out of your calls decently? I played an iron condor, and I missed the perfect opportunity to exit the calls early in the day. Thankfully was given a chance later and took it. Gave back some premium, but still profited. What a stressful day, and won't be doing that again!!! Just wondering how you fared?
Jim,
I got out 85 calls at 0.25 with a small profit since I only had a few, it went down to 0.14 before rocketing to $3.85. I let a bunch of $65puts expire worthless.
If I were with TradeKing, I would have squeezed a little more of something but Ameritrade is just too expensive to do anything...I closed all other positions green.
What about you? Good weekend.
Jim,
Thinking about your iron condor (glad that you profited today)- just too much fee to give to the broker, so I never try. How did it go in long run?
Mark,
Thanks for bringing LO to our list. We have had a little anxiety ride but hey it was good premium. A dinner is on us if you come near us!!
Wow what a wild month. Here is how my crumbs fell over the past 3-4 weeks. I use approx 10K for each position (eg 10 contracts 10 pts apart if using a spread) so the $ amount below is the profit (or loss) after comms etc. All of these were actually spreads (eg Apple was sell 285, bought 275)
1) Apple had sold 285 puts for $310 profit
2) CF had sold the 115 puts for $510 profit.
3) CF earlier this week on sold 135 calls for $270 4) CMG sold 220 puts and 270 calls for $570
5) CLF sold 75 puts for $320
6) RUT sold 740 puts for $410
7) SPX Sold 1260 puts for a loss $800
8) NFLX sold 170 put for $420
Total on approx 90K maintenance - $2010 in 3-4 weeks
Thanks Jerry other than the SPX trade for the rest CRUMB survived Libya and a terrible Earthquake
regards
rhm
Actual Crumb Results (on expiration dates)
DEC 5.4%
JAN 3.4%
FEB 2.9%
MAR 2.7%
Cumulative Compound (for past 114 days): 15.3%
(that's an annualized 58% compounded return)
I've been playing AAPL Weeklys as my primary position.
I sold MAR4 300's for the next seven days - 31 pts cushion for 3% ROI. I would have gone lower, but that was the lowest available Put Strike.
Hi John
Great results. I started in Feb so here are mine
Feb: 2.5% (i made a few "oops earnings report" errors)
March (see above): 2.2%
Cheers
rhm
Way to go everyone. Crumbs worked pretty well even with Japan. I bailed too early.
What is everyone looking at for next week, next month?
What a week/month
My results:
TTWO $15 - expired
BGU $71 - expired
BGU $72 - expired
EBAY $31 - assigned
HK $21 - expired
BGU $75 - assigned
FAS $27 - expired
So I will get put on EBAY and BGU, but all in all it was a great month, earned enough in premiums to cover my rent and bills, come Monday I will write calls on EBAY and BGU, BGU $76 April calls have a bid of $4.20!
I read Jerry's book in February and just completed my first month of Crumb method. Needless to say, I am very pleased with results or 2.48% on maintenance. Trades were...
GMCR $31 expired
GS $140 closed at .05
JOE $ 20 expired
LO $65 closed at .01
MOS $65 expired
NFLX $165 expired
RVBD $31 expired
WLT $95 expired
EWJ $8 closed at .04
Should have let GS and EWJ expire but got a little nervous at the end of the week.
Am still struggling a little with the rule to exit when premiums doubled if there is still plenty of cushion. During the month the premium on a few of these doubled when there was only a 1-2% change in cushion. I hung on and it worked out but I know at some point breaking the rules will bite... anybody have thoughts on refining this rule one based on time left to expiration..?
@ Msurf. I am struggling with that as well. I had 2 positions run through the 2X rule. My opinion is that if you can watch it on a regular basis and you do not have too many positions (10 is the max i can follow) then the hard stops are likely not needed. If you are travelling, busy at work etc then as a general rule you should have the stops in place.
regards
rob
Hi all, great to see such good results. regarding the doubling, I also fudge some with some fudging rules. I use the doubling on the ask price ie; if i sold the put at .35 and the ask was 40, i would use the 80. But if i have lots of cushion and can watch it i will/might hold on a little longer. Also of course is how long to go. If it happens at the beginning of the month i usually just close it and move to a better position. Most times the stock does end up staying above the strike and I would have been safe. But the stress level goes up and I don't want to worry that much. Also if the premium is going up just because volatility and not price drop of the stock, that might influences me too hold on longer. But on the other side sometimes with a premium i will close before the double rule. A smaller loss and less stress. All of my puts expired this month. So a good month for me also especially considering the world news. Trade careful.
Having a great time. some fishing and cerveza
Jerry
@Hannah - My LO iron condor turned out OK, gave back about 75% of the premium I collected, but after all is said and done, I profited a couple hundred. I missed the perfect exit (earlier in the day, which I take you caught, very good!!). Had I caught that, I'd have given up $200 and kept the other 75%. Hind sight! But ultimately, after the LO stress on Friday, the week turned out profitable. Very thankful for that.
@Jerry - Glad to hear you're having a good time! The rules are there to save a persons funds, so that we can trade another day, and they are good for new traders, and older hands alike. Of course, with experience, one would learn to handle things somewhat case by case, with the rules as a foundation. Of all the traders I know or have listened to, not a single one of them follows their rules exactly, every single time. There's just always that chance for a slight fudging, but good rules none the less! By the way, DosEquis, Modelo, or Corona? :)
Have a good weekend all!!
My first attempt at Crumbs trades turned out well. CMG and FSLR. I earned $1116.00 on $29604.00 maintenance from the 22nd of Feb. Thanks Jerry for the Crumbs method. I wonder if anyone has an Excel spreadsheet with Jerry’s formulas that they can share?
Hey Avelino, here's the excel I use for naked puts. You just need to change the 1st four values and it should calculate the rest. I also have one for credit spreads too. Commission fees are excluded in this version, but you can easily them into excel for an more accurate return. Link is below!
"http://www.mediafire.com/?lgyjkbdi9c9i51r"
Here's an updated version for naked puts.
"http://www.mediafire.com/?i9zn6pu7vo24a4j"
And the one below is for credit spreads, which includes commission fees. Cheers!
"http://www.mediafire.com/?rup0xuflw3bho3n"
Hi all,
Noob here (second post). I just made my first put option sell on Friday. Just wanting to see what you all think. I don't trade on margin (yet). Still trying to learn with my own capital first.
I bought 7 of the CHBT April's at a strike of $6.
The stock is currently at $8.34 (28.06% difference). The premium is .70 after commissions I netted $480.55 w/ $4200 at risk of being put.
Good trade for a first timer?
Thanks!!!
DR3Z
Henry thanks for the link to mediafire. I opened a free account with them but cannot figure out how to access your files. Help please.
Henry , I think in your credit column you should be multiplying your credit by the quantity column.
Dr3z the low price of the stocks is a little scary.
Gary are you still ok with FFIV, Seems to be dropping hard?
Henry, Thanks for the spreadsheets.
AndyB,
Henry's spreadsheet actually does what you suggest. Try changing the Qty from 1 to 2 & you'll see the credit double.
DR3z,
I agree with Kiteman,
that low price stock would be a scary 1st trade in my opinion.
Quick math for Roi.
So the math is all divisble by 10s more or less, to get a handle on what you are looking for.
Example WLT Price is 116. 10% is 11.6, lets call it 12, so 116-24 is 92, lets call it 90.
Maintenance is going to be 1/10th so 9. 1%return would be .09 or 9 cents. So we are looking for a return of about .18 for 2%, .27 for 3%.
The 90 put is going for .41 bid .52 ask, so .36 would be 4%.
Maybe drop to the 85 put, more cushion.bid .18, ask .32. If you sold it for .27 you would get 3% with extra cushion.
Enter it into the spreasheet and you get.....
WLT116, 90 put, .45 premium, Roi 4.76%
WLT 116, 85 put, .27 premium Roi 3.08%.
@avelino: you just click on "click here to start download" there is no need to create an account.
And to include commission fees into the spreadsheet, just subtract the fees in the credit column. =)
Thanks Henry. I accessed the file. Very generous of you to share it with us.
I want to say congratulations to those that banked on LO. Just keep in mind that FDA stuff can turn a stock very quickly one way or another (yes, more than 20%, much more actually). If you want to regularly trade FDA related stocks please be extremely careful... or maybe even paper trade them for about a year first. When you see one blow up you'll realize the violent swings these stocks can produce. But again, congratulations!
DR3Z,
I am not commenting about your particular trade, but if you look in the history you will find Jerry'
s trading rules. Also, his book is well worth the $10 investment.
Dave
@avelino: you're welcome!
I hated having to calculate the ROI so if college taught me anything, it's how to use excel haha.
The CEO of NFLX sold all of his shares for about $1M at around $216
hengiss
unfiltered lists of recent stocks traded by blog users
clf,nflx,lo,aapl,ffiv,nke,cat,cf,^rut,^spx,ttwo,bgu,ebay
hk,fas,gmcr,gs,joe,mos,rvbd,wlt,ewj,cmg,fslr,chbt
http://finance.yahoo.com/q/cq?d=v1&s=clf,nflx,lo,aapl,ffiv,nke,cat,cf,^rut,^spx,ttwo,bgu,ebay
http://finance.yahoo.com/q/cq?d=v1&s=hk,fas,gmcr,gs,joe,mos,rvbd,wlt,ewj,cmg,fslr,chbt
Is anyone else having problems with ToS? Any trade I make will not go through, even market orders. Grrrr.
Henry--I am not at all familiar with how that Open Office Spread Sheet works?? I do have it on my system. Does it automatically calculate results or is it just a orderly way to keep track manually?
What a day, got assigned BGU stock at $75, BGU closed at $78.28, at first I was going to write $76 calls, but it opened above $77 today, so I just watched it, tomorrow I look to write at $81-$82.
@nelson: In short, it's a tool use to calculate if the trade is profitable and worth the risk. Just change the qty, stock price, strike price, & premium columns and it'll compute the ROI. I hope this helps, sorry I'm not really good at explaining things haha. Maybe you're confused with why there are so many stocks listed on the spreadsheet? That's because those are the companies I frequently trade so I incorporated the list into the spreadsheet.
closed out my NFLX at the of the day today - nice run up - will climb back in if tomorrow is a down day in the morning and starts recovering mid-day; if not there is LULU 65
also WLT 95 looks ok
John & Jerry, any picks for this month that you have your sites on?
Hey is anyone else having issues with ToS. I have a quote up for options but there is no bid ask showing up.
I am in an online chat room and a few of the people in there have been having Think Or Swim issues, too, so you're not alone Fulgore. Might be java related as I hear the new version is terrible.
Thanks for the update Mark. I have to get in my monthly's / weekely's soon. I hope it gets fixed.
KiteMan
I was more troubled by the NFLX week4 215 puts I sold Thu. now that I'm out of them woods. I look at FFIV and no not worried at all I'm short week4 90's and Apr. 85's
The thing I like is it's at a 1.5 stranded deviation line and it now has weeklies.
If they do go ITM the weeklies make it easy to roll out.
I sold some aapl weekly's at 305 yesterday and some OPEN 70's.
Looking at LULU 60's and CLF 70's...will open if the premium is right
Nolan,
I would caution on selling naked put on OPEN. One of the filter that Jerry uses is a reasonable P/E ratio. OPEN's P/E is over 100 which means this is a very speculative stock.- high risk.
One of the key component in Jerry's Crumb method is to get a small reasonable gain but with as much safety as possible. If he can not find the stock that passed his filters, he does not open the position. A big cushion in strike price is just only one of 8-9 filters that he uses to screen his stock. Just be careful with high PE stock is all I am saying. Good Luck.
nice pop on NFLX, too overbought to get in now; at today's open sold WLT 100 for .87 & LULU 65 for .45
Sold TTWO Apr $14 Puts for .25
I like selling puts on this stock it's been steady lately, nobody wants to sell this stock now, as they are awaiting announcement on when the # 1 selling video game: GTA will be released, the stock always pops when a new GTA is announced/released.
Hi all, wow some good trades mentioned above. To add too what TK said above is probably even more true during these world unrest times. Any one of these factors and add in housing still going down, can trigger a major sell-off. I don't anticipate it but I do prepare for it by leaving more cushion and less ROI. I come home on Thursday night so back to serious trading.
Jerry
@TK- the high P/E does make me a bit nervous so I try to get extra cushion and keep a closer eye on support and news releases. I also try to allocate a small percentage of my portfolio to stocks like that as well. Cheers for the concern though!
@newsportnewsva - LULU 65 is quite close to the money and they released earnings last week that didn't blow the street away...so if the market turns it could fall fast...but the premium on the 60's isn't worth the trade yet for me.
Good luck all
15.8% cushion for 25 days is acceptable for myself for this stock
Earnings were above consensus with a conservative outlook. P/E is high but their projected earnings will bring that ratio more in line with other apparel retailers. They have no long term debt with a great cash flow. The majority of analysts have LULU as Buy or Outperform.
Technically, stock is in a symmetric triangle with support at 73 and 67. If I see a breakdown through the triangle I will BTC. Current price is above all moving averages.
The news from Nike having to raise prices is a wildcard. Will LULU follow suit or maintain prices and could this be a catalyst to drawing in more customers.
This might not be a trade for everyone or the picture perfect 'crumb' trade but it's within my trading tolerance.
Happy trading.
KiteMan
My Crumb / Non Crumb both had closer to the money puts I have closed for a profit
95's on FFIV and 80's on CLF What I wanted to point out is what I do on the up side.
I like Jerry's crumbs but it;s not 100% of my trading. If it was 100% I still would be using the SD chart and surly not selling puts neer the top two bands.
CLF and FFIV
http://i678.photobucket.com/albums/vv145/RagingBullWinkle/2011-03-24-PositionStatementnon_crum.png
The chart I based my move on
http://i678.photobucket.com/albums/vv145/RagingBullWinkle/2011-03-24-PROPHET_FFIV.png
BTC my WLT & LULU for a 3.2% ROI.
Happy trading today.
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