Friday, March 4, 2011
Market looking up with new jobs
Well the market is looking up this morning with a good jobs report. All my positions are doing great, but, still 'out-there' is the mid-east and Libya. So don't get complacent and caught up in the 'I'm bullet proof' state of mind. That is when something in the market sends a silver bullet right through you. Also avoid the rolling up 'to soon' as it has been a long and good run for the mkt. Continue conservatively and just picking up the crumbs. When all the hogs are eating, that is when they keep pushing crumbs off the table. My job is to pick them up..lol
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picked up March 19 NFLX 170 19% cushion .47 2.65% ROI
Hi all, i thought that I would pass along a helpful aid I use in figuring maintenance needed.
I use this to find quickly which rule I will be using.. The 10% or the 20% rule.
Take the current stock price and subtract 12% from that. The number you come up with is a breaking point for the two, Any strike below that and you use the 10% rule and of course above that you use the 20% rule.
ex; If the current stock price is 100
minus 12% = 88 so if you want to use the 85 strike it is 10% of that plus the prem. I hope that helps and doesn't confuse to much.
Jerry
I like it Newp. but I am doing it a little different. I'm sell the next week (3-11) and using the 180 strike. I get .31 for a roi of 1.6 but i can do it again next week for maybe another 1.5 etc. So I end up with over 3% and also have the advantage of being able to adjust the strike I use in the following week to the then current stock price. Also I like the 30 pts of cush and only one week..
Jerry
AMZN Mar19 $150 .32 Just 2%
Have been on sideline for too long that I am almost unwilling to get uncomfortable...
does anyone have good or bad input on apkt
hey Jerry - nice pick up also - I was looking at LULU then noticed they are having their unofficial earnings release on 3/17 or 18 - backed away from it.
Fish,
I sold $55 put APKT last month after it ran up to almost $70. Then it dropped to $64 in an hour and half and then up to $70. I regretted at that moment - Jerry's reminder of high PE stock.
Fish, it is certainly vol... But the march 19 60 w/17 pts of cush gives 3.2% if you can get it at .20
Even the April 50 with 27pt of cush give 3.7%
sold $21 puts on JOE for $0.11, March expiration. 2 weeks of risk, 19.45% cush, 3.89% return. Support at $25-ish and stronger support at $22-ish. Down materially today but on low volume. I have followed JOE for about 6 months and the saga between Berkowitz and Einhorn. Berkowitz seems to be winning the battle.
Hi champion,the product of apkt looks good. I get kick out as the premium up to $1.10 in strike 57.5 mar put. The stock price move up and down fast same as option premium. The other thing is insiders are selling their shares lately.I hope it help.
Info on JOE:
http://seekingalpha.com/article/256278-st-joe-co-earnings-and-revisiting-einhorn-s-valuation-and-omission?source=cnbc
Hi Jerry
Just a bit out side your model
I sold 25 Mar week 1 PCLN 460 puts .30
160K margin .00465 for 5 hours. My hand has not left the mouse.. Last week Vegas this week PCLN :+)
Gary, I'll go order some plane tickets online to help your cause :-)
Mark,
WOW nice bounce!! You must be flying around the world. Thanks.
Sold BGU $72 puts for .85.
Current open contracts:
BGU $72 Puts
BGU $71 Puts
TTWO $15 Puts
UYG $50 Puts
Bought a couple of puts last month that expire this month:
C $5 - will expire worthless
BGU $76 - might get something out of this
Up until now I've been lucky on the selling side of puts, as every single put I have written has expired worthless, no buy backs, hopefully the lucky streak continues, but I'm done with buying puts, that is definitely a losing game.
Still looking to make a trade or 2 more this month.
traded anr 48.00 puts for a 2.2 percent trade 17 percent cushion. traded cmg 210 for .50 premium. traded fslr 120 for .21 premium. looking for netflix weekly 180. what a day. im on vacation at the beach in corpus christi tx so i better get back to the bar. lol
sold more JOE $21 strike (when share price was $25.88) for $0.15. 18.86% cush, 5.19% return, 2 weeks until expiration.
My NFLX put sell expired worthless for the weekely. 1.6% return. this X4 is 6.4% montly .. can't go wrong.
CLF doing well for my monthly on this one. It was down today but just had 2 strong days so there is still a 25% cush on it. I got the 75 put.
Check out JOE chart for today. Berkowitz named chairman, thought he might be winning vs Einhorn :-) Short squeeze in effect...
specifically, check the last 10 minutes on JOE.
Wow, you guys have been busy. I got in around of golf and still made money today.. so, does more golf always = more money?
Mark, looked at JOE. I see the support but no PE, some sell recommends. But maybe the real;-estate business is coming back?
Even in a down mkt today it sounds like we are making money.
Hannah, did you do any trading?
Jerry
How'd you hit 'em today, Jerry?
JOE is an interesting animal. Even with some non-crumb attributes I felt confident to pull the trigger as I've followed the company for awhile. Wouldn't be surprised if Berkowitz announces some sort of joint venture with HHC in the next month or so. JOE was just horribly run eventhough they have solid assets. With Berkowitz leading the charge good things seem to be on the horizon. Of course, as far as my puts go I only care about this for the next two weeks. :-)
regarding golf, the kid (23years old) that is leading the Honda Classic. Kyle Stanley, He is from my country club. A really nice guy and has all the tools. He grew up playing here and still calls this home. He probably tries to copy my game and I wish him well...lol
Jer,
I looked up this Kyle Stanley, guess he did good at 23.
I have one position AMZN $150. AMZN is forming short term base around $170??
I was so mad for jumping out $140(46.67) pot when its premium doubled while I still have $25 cushion. 3 days later it was at $63. Ouch!!
All my loses came from the same FEAR of looking at the premium % increase rather than the cushion. A spike in volatility could double the premium easily even though there was plenty of cushion occasionally(time to use my head more clearly or does it justify jumping out?)...what do you think of that?
So I took a breather...
Good golfing - sound like a nice country club you are in :)
Hi Jerry & all - hope everyone is having a great weekend - at the beginning Jerry you were mentioning your quick and dirty formula; being geeky I ended up using excel to plug both of the formulas TradeKing say they use and use a "IF" statement to fill, calculate, etc - so far so good at a real close estimation. One thing I did discover (one of those 'DOH' moments) as the current stock price goes down, at a certain break point the amount of maintenance required goes up. I as starting to look at ramping up the number of contract sold to maximize maintenance I noticed if the stock were to drop X dollars I'd have a margin call on my hands possibly. EEK!
Hi all, which broker would you guys recommend for credit spreads and naked puts. I'm currently using TradeKing. Are there any brokers out there that can beat their prices?
HI all, Henry, I use Ameritrade, Not that they are the cheapest but all the service is good and quick fills. All in all i like 'em. I have been with most of the standard ones. If you go to Ameritrade ask to be an APEX account. You get TOS and a ton of extra stuff and cheap option cost.
I have been reading some about the brokerage 'LIGHTSPEED'. They are pretty cheap but I have no idea of service etc.
Newport, My maintenance is adjusted each night. I don't sweat the maint calls. If all the ducks are in a row i let it ride for a day or two. In fact I got one today. lol So Monday i will see if anything needs adjusting. That is a recurring problem when you max out the maint...
Hannah, If there is little time left and the stock is doing ok, I fudge on the doubling rule. but not all that often. Also I think I remember advising to not play with POT during the split. That is another one of those places where, you win big or lose. There are two many stocks out there that have no 'known' situations coming. Also with splits, after the split your strike is now often very close and if profit taking happens ... all of a sudden it ain't good!
--------
Ok a funny story of the good old days.
I think it was 1999 or 2000. I was writing for a magazine and they sent me on a horse back trip into the wilderness of Colorado and I was to do a story. Well right before i left i bought 9000 shares of Qcom. I was doing options but just had these shares. No cc's etc. So I go into the wild for a week and come back. they take me to the airport in Cortex CO. I am the only person there and with an hour to kill and it is Sunday, i go through the trash can to find a newspaper. The stock report is there so i skim through for QCOM ..For the week it was up 27 points... So keeping my fingers out of the market i made 250,000 in a week.. Ahh the good old days..lol
Jerry
I think its time I visited Colorado! ;))
My NFLX premium doubled this week but let it ride a day and it came back to reality! I think you have to watch the chart and the point cushion and judge from there where the support and sentiment is on the stock.NFLX showed support on its 50SMA. I saw alot of you sold when it bounced on Friday..good job with patience and technical read.
I like Jerry's rule of the double premium as a starting point for me. I def have alarm bells ringing but it just pushes me to to do more research and see if the premium is telling the true story. I think if you were to always sell when the premium doubles that's very safe and would end up way ahead in the long run.
ENjoy the weekend crumblers ;)
Hi jerry, thanks for the input! I don't think I'll qualify for an APEX account since I don't have an 100k account value. LightSpeed looks very tempting with their low commission fees. I'll stick with TradeKing for the time being, their custom service is fantastic and I don't usually trade in heavy volume. Cheers!
I'm very bullish on NFLX for the next week. I agree with Nolan regarding the 50SMA. Also, NFLX open at around 205 the day after earnings. That support level has now been tested once. I don't think NFLX will go under 200 this week. All my positions are closed, but I will look to get in on Monday. If the day starts negative, then I might wait until the afternoon though.
I still don't like AAPL for this week, and don't think it will cross 370. I won't short it though, but I don't like the weekly for bulls this week. The price has gone up too fast and needs a break.
I also don't like the AAPL options as much this week because the IV is around the 33 percentile of the 52 week range. NFLX is at the 45th percentile which is acceptable to me. Just my thoughts.
AAPL is releasing the ipad 2 this friday (march 11th). I think the stock will go up or remain the same with the hype surrounding the launch.
Well that is interesting. I'm anxious to see what happens then.
Feeling adventurous today, sold ebay $31 puts for .65.
Hey nicky, how much cushion did you leave? Ebay is currently trading at $31.28, is it worth the risk?
I'm not really being adventurous I just wrote that, the thing is I own ebay shares, an uneven amount, I want to write Covered calls on all the shares that I own, so to even them out I can buy a few shares or write puts like I did and if I get assigned that's when I will buy the few shares, then I will write covered calls against all the shares, I hope I made sense of things.
NFLX premarket down close to 5% or almost 10 points.. Hopefully it bounces or closes above its 50SMA. If that stays into the open its gonna give the premiums a huge boost
safety first with cushions!
I really thought NFLX would hold above 200. I hope it isn't breaking down. Most likely it will bounce back, but I can't take that chance. I'm taking my losses now.
Dave
Looking at NFLX I have the 180 for this week and feel ok. But what looks like a good trade would be NFLX for the 175 this week. 1.4% Roi and 25pt of cush with 3+ days to go?
I don't usually trade a falling stock but with 25 pt of cush it looks mighty good.
NFLX will have a hard time getting down to 180. That's below the close just before the last great earnings report.
Question,
Should we start considering short positions? Or is this temporary jitters due to unrest in Libya, etc. I am still bullish, but just wondering what others are thinking.
Thank you,
Dave
I already had the NFLX weekly 175, sold some Weekly 170 and added more monthly 145 today. Nice return, great cushion, short time frame.
Word of caution on NFLX is that the other side of the trade is probably looking at the nasty gap up from low 180's to around 210's in late January. It broke support at 200 and could gap down to 180-ish again quickly. If I was to place a bet I would side with you guys, but just want you to be aware of the potential gap down to low 180's. 175 and lower strikes most likely fairly safe bet as support at 180 is pretty strong.
Just a side note, NFLX is down because they're facing competition from amazon and time warner. Plus, the P/E is high so the price swings are volatile.
Dave, I added SPX Sep. 1350 puts yesterday @ 93.00 I also sold Mar. week 2 - 1295 puts @6.50
I think going forward this will be nice money maker plus feather hedge against my already hedged longs. I'm only about 25% crumb at this point.
You can do the same with SPY I only picked SPX because 10 contracts commission is 8.50 100 contracts on SPY would be 85.00
Added to JOE puts. $0.10 premium, 21 strike, 26.73 share price (21% cushion), about 3.5% return. 8+ days until expiration. Looking to add more at 0.10-0.12 but unlikely as the bid I hit was only 20 contracts and current bid is 0.05.
Current positions:
GMCR 32's (about 22% cushion)
JOE 21's (about 21% cushion)
both expire 8+ days
NFLX is tempting but I am going to stay away and be ultra safe.
NFLX
Facebook looking to offer online movie rentals. Most likely won't push NFLX down to the strike's you guys sold puts at, but just wanted to share FYI. I trade full-time so I have the time to post news from time to time on various stocks.
In terms of Market cycle. IBD went to "market in correction".
Jerry, I like your qcom story. My stocks always do well when I go on vacation. They seem to know that they have to pay for the vacation.
First post!
Hello all. First Jerry. I've followed you over from the tradeking site hope all is well. I am a total noob to this and am looking to play. I don't have much starting capital (7k) but am very intrigued by your concepts. I have a question for the commentators (or Jerry).
Reading this forum, I've been looking at JOE. Since, with my capital on hand, I'd like to sell a cash secured put. I just want to see if someone can verify my math.
I'm looking to buy 3 of the JOE APR 23 @ 1.00
Gain of 4.25%
Cushion of 14.59%
Am I right with the math? Thank you in advance!
Hi dr3z, welcome aboard. First I am wondering if you meant to SELL the puts? I assume you do...
A couple things, if you have my book you will understand when the others are talking about cushion and ROI (return on investment)
But about your idea...
1.If you are planning on using the April puts, that is giving away over 5 weeks of time and you are only leaving yourself $3.5 in cushion. So about 13%. In aftermarket Joe is trading down some. The only strike I would consider is the 20 and not real happy with that. But the ROI on that would be over 10%, if traded at the .25 prem. You then have 6.5 roughly of cush.
But back to your trade.
the April 23 strike pays .80 - you would need about 3.3 maint so the return is .80 div by 3.3 and your ROI is 24% Yikes...
You could trade the MARCH 21 and get a nickle really only .04 after commish. and the maint is 2.25 so .04 div by 2.25 = 1.7% in 8 days. not bad. I hope that answers some of your questions if not fire away as we are all here to share, learn & enjoy. We all were at a learning point at one time.
Jerry
Sold a bit more JOE (40 contracts) at $0.10 late in the day. Hoping for a bit more on this name but it's been tough to sell puts at $0.10+ which is my target.
TradeKing - I like the new prices :)
Guys can you share the general complains/imperfection about TradeKing? Thanks
Hannah,
It doesn't matter what my issue was, but I was not getting an answer I liked to a question I had. That is my complaint. To TK's credit, I emailed the President and he actually responded, right away. He also had someone more knowledgable answer my question. I didn't like the answer, but I did like the followup. That's why I stayed with TD.
Dave
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