Making 1%/week selling covered calls

Quote from DarkProtoman:

I have taken fork b, and realized my plan probably is crazy.

I'm happy to keep pace with the market.
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Good to hear. You saved yourself a bunch of money, and you didn't even need to call Geico :)
 
Quote from TheGoonior:

Are you trying to acquire the shares or just trying to sell the put and let it expire worthless (or buy it back cheaper)?

In my experience, cash secured puts are used on a stock that you want to own at a better than current price. Rather than just throwing a limit order out there, you sell cash secured puts on a monthly basis and this reduces your cost average. Assuming there is no huge gap down, eventually you'll get the stock, but it will be at a discount (hopefully) since you've been collecting put premiums along the way.

I must confess that I pay no attention to implied or historical volatility: I can tell from the chart how volatile things are. I also compare the premium (as a percentage) of an ATM, front month option versus it's current price. Anything over 4-5% means we're in roller coaster land.

It is oversold by lots of indicators, but it's also dropping like a stone on big up days like today and hasn't participated in any of the recent rallies of the general market. That: 1) tells me it's sick and 2) it's out of sync with the general market so it's tougher to read.

I've no clear idea on what to do for that one, so I'd pass on it.
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I'm trying to sell the put and let it expire worthless for this one.

What about an AMD Jan10 5 put? It's trading at $0.69, of which $0.52 is time value.

Also, chip sales are forcasted to rise in 2010-11.
 
I figured out a simple way out of our power dilemma.

Why not build a car with a Generator driving electric motors but have a belt or mechanism from the axles back to the generator.

Unlimited power and since the generator powers the motors but since the motor is spinning it spins the generator.

Dumb engineers cant figure out such a simple scheme.
 
Quote from KINGOFSHORTS:

I figured out a simple way out of our power dilemma.

Why not build a car with a Generator driving electric motors but have a belt or mechanism from the axles back to the generator.

Unlimited power and since the generator powers the motors but since the motor is spinning it spins the generator.

Dumb engineers cant figure out such a simple scheme.
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Sorry, can't do that. Perpetual motion machines cannot work b/c they violate the 2nd law of thermodynamics.
 
Quote from johnmarg:

Dark:

what is your plan if AMD falls to 2 in price and you have to buy it at 5 because of the put you sold?
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I have considered that, which is why I will be trading a bull put spread.
 
Quote from DarkProtoman:

The GSS NOV09 5 put is selling for $2.05, IV of 101.48%, which is 33.77% above the stock's 30-day HV.

The price would have to drop to $2.95 on expiration for it to be profitable to exercise; it's currently at $3.62.

I should make 35% if the share price goes up, or at least doesn't drop below $2.95.

You need to donate some time to reading up on options. If the stock is under $5 at expiration, count on exercise... and please explain how you will make 35% if the stock doesn't drop below $2.95.


The Aroon oscillator just crossed above 0, so an uptrend is starting. And the Ultimate oscillator also crossed above 50.

Oscillators mean nothing when news or buy/sell programs hit.
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Quote from DarkProtoman:

What about Sprint?

The Feb10 3 put is selling for $0.55, w/ an IV of 75.32%, which is above the stock's HV of 42.90%. It's time value is $0.38.

And it's currently oversold by a lot of indicators.

Your opinion?
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grasping at straws

straw_mouth.jpg
 
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