My 2013 Option Trades.... part 3

<<< BTW: My value assignment to "super amazing tech support " is ZERO. >>>


The point being, there is nothing stock specific about your "generic calculator".
Not your stocks sector, tech support, earnings, cash flow, insider buybacks, insider selling, debt level, R+D trends, ect.....
As long as any stock is the same % otm, has the same IV, ect, the results will be the same.
Doesn't matter if one stock is in sector "X" and the other in sector "Y".
Doesn't even matter if one stock is $25 and the other is $55.

I'm just making the point that you are better off evaluating your trades probability, potential, and other metrics.... based on analysis, common sense, experience, and so on.
Relying on % calculation results, from a "generic calculator", which does not consider 98% of the criteria specific to that company, is a risky thing to do.

Take away either % otm and/or IV from the calculator, and you are left with no analysis.
It doesn't even care what the sector is, whether there is tech support, whether they even have earnings, whether their debt load is super massive or debt free, ect.....

Take two stocks from 2 different sectors, with similar % otm, similar IV, ect....
One could be priced at $15 with the other at $40.
One could be trading at an all time high, with the other at an all time low.
One could be an industry leader and the other an industry laggard.
Your results will be similar.... if not exactly the same.
If that's not the definition of "generic", then what is?
 
Quote from dfantome:

PM is legit. Ive followed some of his trades, and seen the lots he's sold.
Im guessing he's working with about a 500,000 dollar account from the quantity and strike price of the puts he sold were.

oh and this is spot on..

Bottom line..... your assumptions are based on the unpredictability of more than 6 months exposure to the market,.... 2 earnings cycles,.... using massive amounts of fantasy leverage,.... an inability to consider buying 90% of your stock(s) , even if they're just slightly below your $17 strike(s),.... you risk a 100% loss of capital if the stock(s) drop 18% below your $17 strike,.... and most of your calculations are ridiculously "generic", thus having little to do with your actual specific stock.
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But you sir, are FOS. Your BS about buying NFLX and reporting it here after the stock dot-shots.
 
Quote from atticus:

But you sir, are FOS. Your BS about buying NFLX and reporting it here after the stock dot-shots.
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You really should give ol' forexforex/diaoptions/dfantome some respect. No doubt the $750 seed money he started with a few weeks ago is up to a couple of mil now. Personally I consider myself humbled in the presence of his greatness.
 
Quote from probe1957:

You really should give ol' forexforex/diaoptions/dfantome some respect. No doubt the $750 seed money he started with a few weeks ago is up to a couple of mil now. Personally I consider myself humbled in the presence of his greatness.
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Actually up 80X, but close enough. And I can't believe ive become such a legend around here that people think im someone else.

And atticus.. when I was reading your journal, I believe I saw one week where you made over 1 million dollars..

How does my under 80k even concern you? You've made millions in one week!

Yeah I hit the jackpot once, now im making that work for me and im still only making 1-2k a week.. how is that unbelieveable?

I was thinking of making a journal for future calls, but theres nothing I could do to convince you it was the truth.

I just have trouble comprehending someone who's making millions a week is saying its impossible that I made out on one good call?
 
Quote from dfantome:

And I can't believe ive become such a legend around here that people think im someone else.
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And I can't believe ive become such a liar around here that people think im someone else.

Fixed that for you.

Quote from dfantome:
How does my under 80k even concern you? You've made millions in one week!
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After your alleged NFLX homerun you were up, as I recall, about $25k. Now you claim to be up $80k? Have you posted any of these alleged trades in real time or was it all after the fact as in your alleged NFLX homerun?

Quote from dfantome:
Yeah I hit the jackpot once, now im making that work for me and im still only making 1-2k a week.. how is that unbelieveable?
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You hit the jackpot way more than once if you are now up $80k.

Quote from dfantome:
I was thinking of making a journal for future calls, but theres nothing I could do to convince you it was the truth.
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Of course there is. Post the trades in real time. It isn't that complicated yet, for some reason, I don't think you are going to be forthcoming with these details.

I don't think you're going to be forthcoming because I think you're a liar, a tool and a fraud. And BTW, in case you haven't figured it out, so does everyone else.

Fortunately I have a way for you to redeem yourself. You have gone into some detail about your alleged awesome trading history. Why not forward to Atticus your trading account statement? Feel free to redact your account number if you think that is too personal. He will verify that what you have said is true.

So while you contend that there is nothing you feel you can do to convince people here that what you are saying is true, I hope you can now see that there is. That said, I don't expect you to be forthcoming with these details because I think you're a liar, a tool and a fraud.
 
Quote from Put_Master:

Sold puts on $70 VMW for April.
Credit $2.05
Annualized % return.....14%

http://finance.yahoo.com/q/bc?s=VMW&t=2y&l=on&z=l&q=b&c=

The 2 year chart above shows tech support in the $74 - $76 area.
Thus it can certainly fall more, if a bad market takes it down.

But I decided to lock in the $2.05 credit, 14% return, 9% otm safety cushion, and BE price of $67.95..... as I did not want to risk missing the trade with the weekend coming up soon, and the stock volatility calming down.

VMW presents a mixed picture.
Via some metrics the stock is still over valued at my $70 price, but reasonably valued via other metrics.
But given that it is also financially healthy, I decided to take a chance on a BE price of $67.95.
If I'm wrong, the stock can drop into the low 60's and still generate a reasonable income for me, via covered calls.
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I closed this $70 VMW April trade today, 5 weeks early.
Initial credit $2.05.
Closed for $0.20
Thus keeping 90% of the credit.

I also have $70 VMW puts for March, which expire tomorrow.
I'm letting them expire with all my other March puts.
 
Re VMware, good trades.

Did you consider these on-margin or cash-secured trades? I'm curious because the strikes seem to be more than 2x your normal selling range.
 
Quote from Brighton:

Re VMware, good trades.

Did you consider these on-margin or cash-secured trades? I'm curious because the strikes seem to be more than 2x your normal selling range.
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I really don't know what you mean by 2 times my normal selling range.
I don't have a normal selling range.
If you are discussing strikes, I will not sell as many $70 strike contracts as I would for a $25 strike trade.
Don't need to, as the $70 strike trade would offer a higher credit than the $25 strike.... per the same unit of time, % otm ect....

As for whether it was a cash secured or a margined trade,... if I initiated the trade shortly after other trades expired, and i was sitting in cash, then it was a cash secured trade.
If i initiated it, or any other trade, AFTER I had used up my cash on other trades, then it was a margined trade.
Bottom line..... all my trades are "potentially" margined, whether they start off that way or not.
Whether it was the 1st, 3rd, 10th or last trade that put me on margin, is irrelevant.
If/when i eventually end up on potential margin, then the issue of relevance is,... that the account is now margined.
Not which specific stock put me on margin.
 
OK, Thanks.

I thought I remembered reading that your system works best with $25-$40 strike prices, so $70 seemed out of the range.

A mix of margined and cash-secured puts would seem to diminish the importance of a pre-trade ROI calculation, but maybe you're just using that as a hurdle rate, i.e. the trade has to show 13-16% PA as a cash secured transaction, even if it might turn out far better because the overall account is, or will be, on margin before option expiration day.

There's no right answer, I was just curious about your trade selection and mgmt process.
 
<<< I thought I remembered reading that your system works best with $25-$40 strike prices, so $70 seemed out of the range. >>>

The actual strike price, relative to my strategy of selling naked puts, is irrelevant.
You may be refering to my discussion about selling credit spread puts.
For that strategy, the higher the strike the more leverage you will be using.
As such, a $15/$12.5 put credit spread is much less risky than a $70/67.5 put credit spread,.... even though they both have a similar 2.5 gap spread and a similar number of contracts.
Why?

The 70/67.5 spread will cost you nearly 5 times the cash to consider buying, than the $15/$12.5 spread.
Whereas, it would cost the naked put seller the same money to consider buying his $15 strike, as it would his $70 strike,.... assuming he was willing to risk a similar amount for both trades,
While a similiar amount of cash risked on a spread would cost nearly 5 times as much, to buy the $70 strike.
 
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