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i am just selling monthly $3 puts, if it manages to drop < $3 on expiration, then i will buy/hold and start selling covered calls. I agree long term this stock will probably breakout, but the current technical chart looks like a horror show, dont think it's the right time to get in just yet...

cash infusion of about 6 billion, but dilution at $48 a pop. A lot of unhappy players after the $48 firesale was announced. Do you guys think MER will be able to hold on to the $50 support, and will there be a gap down on Wed as traders come back from xmas break.

CMF and MA/EMA crossover looks good, but the macd histogram is out of place at the end and the price just hit the resistence. I would wait until it breaks out for a safer play depends on what type of option trades you are looking to implement...

do you mean to short out of money index puts on a monthly basis?

Thanks atticus/all, I am going to play the month over month until after 08 Q1 results are out, then things should settle down enough to try a leap using one of the strategies suggested here.

sorry can you list out the trade for those 3 strikes from the long fly. I am not sure what is a long fly. thanks

Thanks guys, all good points. Just want to clarify a few suggestion made. 1) Use financial index instead of single company to significantly reduce counterparty risk XLF at $29.2 2) Short ATM put for next month - Example(using 1 contract) short XLFMC JAN 29 PUT at $1.10 = $110 3) If XLF...

Then i go broke and lose all my money :( but isnt that true when you short anything without hedge? I am making a bet based on current market condition and the company that there is a very low probability this will occur. Could also play it safer, and buy the 2009 45 PUT then my max loss...

What do you guys think about doing a naked short on an investment bank's 2009 out of money put? The reasoning is that by 2009 the financials should recovered and be higher than current price which most agree is near the bottom. For example lehman (currently at $60) has a JAN 2009 put...

atticus, what are you saying exactly i dont understand. The Jan 70 calls are 0.45, 75 calls are 0.15. Below is my trade: - Short MERAM (Jan 65 Call) - Short MERMJ (Jan 50 Put) --------- FF, yes it's something that has to be decided when the time comes. As a general rule, i usually...

i am sorry you guys lost me here. What you mean? "keep the shorts open? Open at a nickel? " and the response to that? didnt get it.

Hi guys, i dont mean to offend anyone but is ~$100 profit per day as posted by the original poster considered good/successful around here as a trader? I am just very surprised considering quite a few job fields pay $50-100 an hour easy, plus med/benefits, not to mention you dont have to risk...

thanks guys, i checked out iron condor for MER. But do you really think it's a good idea right now vs just a short strangle? Contract size: 25 Strangle: -Short 50 PUT (MERMJ): 1.6 -Short 65 CALL (MERAM) 1.25 Risk: -MER between 50-65 = max profit -MER between 47.15-50 OR...

Sorry can you explain more what atm straddle (what does atm stand for?) and implied distribution means? I tried search google but cant find a useful explanation for those 2 terms. Also if Feb begins trading after Dec expirtation, why is Apr already being traded? thanks...

Hi guys, I am still learning, have a couple more questions. 1) - Short MERAM (Jan 65 Call) - Short MERMJ (Jan 50 Put) I dont think MER will move outside of this range by Feb, the current resistence / support seem to be around 62/55. My plan is to hold it till both expires...

lol thanks guys! that cleared things up quite a bit. I had a feeling it's very risky. Btw the stock i was looking at is hsy, it's been flat around 42-44 for a while and doesnt likely to move above 45 by nov expiration. So my logic was to naked selling the nov 50 call, it seemed like free...

Hello, i tried to research this on google but couldnt find much help, was hoping the experts here can explain this to me. StockA price: $42 Nov 50 Call: $0.3 If i naked sell 100 contracts to pocket a premium of ( 0.3 * 100 * 100 ) $3000. I understand that on Nov expiration date if...