Bull Put spreads

Kedwards,

I am taking very careful consideration of any announcement dates coming up. In most situations, a pending announcement date is the only way I can get a decent credit on the puts. That being said, I believe ITMN's news will be positive. If not, I still do not believe bad news about their pending drug status could shoot the stock all the way from 16.14 to 7.50, although I'm sure crazier things have happened.
 
Even on the stocks that already lost 70% overnight it's a loser proposition...
Like 10/7.5 on MDVN you make a nickel...risking 2.50...
No, not really ...not for me anyway...

I still think it's a probability game overall and all the options are fairly priced all the time and it's a negative sum game for us, traders, due to the spread and comish...
 
I currently have a number of far out of the money bull put spreads on stocks that I think are 'safe' bets.

Right from my IB credit spread page:
BAX, CLX, ED, HNZ, HSY, JNJ, MRK, PBCT, SO, SYY, WGL

Expirations vary.

I usually have MCD and WMT but they have expired and I haven't been able to get a good fill to replace them.

These are all bull put spreads set below their recent lows.

I get out at the first sign of trouble. As a first warning I just scan (about twice a day) the change from yesterday on the stock and investigate any large change. I follow the news on each company but usually the market knows before I do.

Nickels and steam rollers? Yes it's a risk. I try to reduce risk by using large diversified companies when possible and diversify across stocks and time also.

I personally wouldn't go near a biotech with this strategy... but that's me.

Unfortunately you get paid for the amount of risk you take. I am earning about 15% annualized with this (what I consider) very conservative strategy.
 
Danshirley,

That is the kind of annualized return I'm hoping for. Nothing drastic, just another way to make income each month. I will follow the stocks you currently put bull spreads on. Thank you.
 
I have been trading BPS on the SPY. One of my first spreads was outlined in the bang option thread.

My latest spread is a Mar 100/103P. The details are in my journal.


I use SPY because you dont have the individual single stock risk.
 
Quote from rockthecasbah12:



What does anyone think about my ITMN trade? I feel as if it is pretty safe currently, and the credit is still well worth the risk.
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You do know events are coming up this week and next?
 
Quote from danshirley:

I currently have a number of far out of the money bull put spreads on stocks that I think are 'safe' bets.

Right from my IB credit spread page:
BAX, CLX, ED, HNZ, HSY, JNJ, MRK, PBCT, SO, SYY, WGL

Expirations vary.

I usually have MCD and WMT but they have expired and I haven't been able to get a good fill to replace them.

These are all bull put spreads set below their recent lows.

I get out at the first sign of trouble. As a first warning I just scan (about twice a day) the change from yesterday on the stock and investigate any large change. I follow the news on each company but usually the market knows before I do.

Nickels and steam rollers? Yes it's a risk. I try to reduce risk by using large diversified companies when possible and diversify across stocks and time also.

I personally wouldn't go near a biotech with this strategy... but that's me.

Unfortunately you get paid for the amount of risk you take. I am earning about 15% annualized with this (what I consider) very conservative strategy.
More...

How many points apart between the selling and the buying leg? And how much time untill expiration?
 
Quote from rockthecasbah12:

Anyone here trade bull put spreads? I'm new to it. I virtual traded for awhile on a practice account and am about to get into it with real money, albeit very small amounts to begin with.

Any successes or failures?
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Sure, like I suspect most people in the options trading section I've sold bull put spreads. Sometimes they succeed, sometimes they don't. I always stop out before they get to their worst case loss.

The same, of course, applies to selling bear call spreads. Every option strategy you can think of will make money some of the time and lose money some of the time.
 
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