Conservative Options Trades

 
 
WMT:
http://finance.yahoo.com/news/WalMart-US-samestore-sales-up-rb-2977239744.html?x=0&.v=3
http://finance.yahoo.com/news/WalMart-on-track-to-reverse-apf-4225169770.html?x=0&.v=16
http://www.nytimes.com/2011/10/13/business/walmart-stores-sales.html?partner=yahoofinance
http://finance.yahoo.com/q/ks?s=WMT+Key+Statistics
http://moneycentral.msn.com/investo...ment=10YearSummary&symbol=US:WMT&stmtView=Qtr
http://finance.yahoo.com/q/bc?t=5y&s=WMT&l=on&z=l&q=l&c=&c=^DJI
http://finance.yahoo.com/q/is?s=WMT
http://finance.yahoo.com/q/bc?t=2y&l=on&z=l&q=l&p=&a=&c=&s=WMT
Trade:
Sell the Mar '12 47.50 put and buy the Mar '12 45 put for a net credit of $30.
Yield = 30/220 = 13.64% in 156 days or 31.9% annualized.
Prob = 85.4%
Expectation = .854(30) - .074(220) - .072(110) = 25.6 - 16.2 - 7.9 = 1.5
Just a slight edge in our favor to WMT options.
 
DAN ,
I finally found your post but then missing you since your last post. Please let me know where you are posting now.
I hope all is well with you.
Couple of questions,
I have been reading your post for a long long time and have learned
a lot.
1) I notice on all your posts, you always linked some articles on the subject, I like to learn where to find them. Sometimes you find
articles from some local newspaper (i.e. other than WSJ, Barrons,
Seeking Alapha or Motley Fool).
2) Is it worth to pay for subscription fees from Optionistics to get up
to date probability for your BPS or BCS ? Or any other resources?
3) I know you are very conservative, but most of your stocks on your
recession lists are near 52 weeks high, when you entered a trade
and the trade goes against you, do you get out when you are 100% down or 80% down? ( You always try to shoot for 90 or 95% success
ratio and 15% annualized rate of return.) Occasionally this does happen (similar to stop loss by %).
Appreciate your response and please keep posting. Thanks
http://www.elitetrader.com/vb/reply...n=newreply&threadid=225849&#threadid=225849&#
HumbleBeehttp://www.elitetrader.com/vb/reply.php?action=newreply&threadid=225849&#
 
Dan,
I finally found your post but then I have been missing your post for a
long time. Hope all is well with you.
Couple of questions :
1) When you post, you always link some articles, Can you tell me where do you find them? Sometimes you even post articles from local
newspaper (i.e. other than WSJ, Barrons, Seeking Alpha or
Motley Fools etc).
2) Is it worth to pay for subscription fees from Optionistics to get
up to date probability numbers ?
3) I know how conservative you are, but with most of the stocks on
your recession list near 52 weeks or all time high, how do you
stop loss your trade, with 80 % or 100 % loss ?
Thank you for your response.
Humble Bee
 
Perhaps the solution for you is to post your trades in the journals section?

There, you actually have a legitimate spot to exhude your trading skills- you have a lot of followers it seems.

Please don't Cohodize this forum !
 
HOG:

http://finance.yahoo.com/news/harley-davidson-shares-rise-citi-170500367.html

http://finance.yahoo.com/q/ks?s=HOG+Key+Statistics

http://investing.money.msn.com/investments/financial-statements?symbol=hog

http://finance.yahoo.com/q/bc?s=HOG+Basic+Chart

http://www.youtube.com/watch?v=0NcLG2afZJg&feature=related

http://www.youtube.com/watch?v=IPgcF6ACU28


Trade:

Sell the Aug 35 put and buy the Aug 30 put for a net credit of $34
Yield = 34/466 = 7.3% in 158 days or 16.9% annualized.

Prob = 92.3%

Expectation = .92(34) -.02(466) - .06(233) = 31.3 - 9.3 - 13.9 = 8.1

Expected yield = 8.1/466 = 1.7% in 158 days or 3.9% annualized
 
Dan

Do you roll over early when a significant portion of the premium is earned
i.e when you still have a month or more left before expiration ?
FOR ME
The down side is missing a small percentage of profit.
The upside is not seeing a once good trade go south.

Thanks for showing a very successful and disciplined approach
to option trading.

cheers
john
 
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