My OPTION TRADES..... part 2

Quote from seeyounxttues:

thks for the response and examples, its a lot of data you are dealing with. do you use any paid for services for fund' news or is it all widely available for free on the web?

and the reason for not writing naked calls is cos of the 'unlimited' upside?
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I'm not looking at news.
I'm looking at numbers, trends of numbers, and ratios of numbers.
If i like the numbers and chart support, I'll then review the news over the last week or two, just to see what's going on.
But everything i need is found on free sites like Yahoo and other places.
I don't pay for anything.
In part because everything i need is free, and in part because I'm not interested in following recomendations, which everyone else is getting at the same time. I prefer to lead the crowd. Not follow it.

I don't sell naked calls mostly because I don't pick tops.
I don't know how to pick tops.
I prefer to pick bottoms.
Picking bottoms via chart support and various "value criteria," is simply MUCH easier to do.

I'm not trying to impress anyone. I just find keeping it simple results in a higher probability and % of my trades being successful.
Nor do i use probability calculators. I prefer using common sense to evaluate a trades likelihood of being successful.
My last 2 trades today of $17.50 ACTG and $24 NTAP are a reflection of that.
 
Quote from Put_Master:

I'm not looking at news.
I'm looking at numbers, trends of numbers, and ratios of numbers.
If i like the numbers and chart support, I'll then review the news over the last week or two, just to see what's going on.
But everything i need is found on free sites like Yahoo and other places.
More...

sorry, for fundamental news i meant earnings reports, annual stats etc - its news and its fairly fundamental....but i used an ambiguous term.

thanks for posting, learning a lot.
 
Sold 13 puts on $24 PAY for Dec.
Credit $0.45
Annualized % return........... 12%
otm safety cushion.... 20%

I initiated the trade when the stock dipped under $30, as there is very good L-T support at $30, per the 2 year chart below.
http://finance.yahoo.com/q/bc?s=PAY&t=2y&l=on&z=l&q=b&c=

Overall, the fundamentals and price value are reasonable at my price of $24.
It's still a little expensive at $30. But 24 relates to a reasonable price value.
My main concern with the company is it's debt load.
They can still handle their interest payments, but there is not much cushion, if earnings take a sig drop, and/or expenses rise.
Hence the reason I selected a price of $24, with a 20% otm safety cushion, and a BE price of $23.55
 
Sold 13 puts on $22.50 ATI for Dec.
Credit $0.50
Annualized % return.......... 14%
otm safety cushion... 17%

Per the 5 year chart below, there is reasonable tech support in the $26 - $27 area. If that breaks, the next real support is $20 - $21.
http://finance.yahoo.com/q/bc?s=ATI&t=5y&l=on&z=l&q=b&c=
So I'm taking a chance with my $22.50 strike.
But with a BE price of $22, I don't mind owning the stock, if a bad market takes it down to the next support area of 20 - 21.
But i don't anticipate that occuring.
It's fundamentals are overall pretty reasonable, and the stock is a good value at my strike.
 
Put Master, I take a glance at this thread every week or so and on at least two occasions we've made a very similar trade, either on the same day or within a day of each other. Note: I'm not copying you; I invest/trade in a number of energy & agricultural commodities and companies and sometimes I take the "pick & shovel" approach which is why we've overlapped on these transactions:

1. TITN - Titan Machinery (farm & constr equipment dealerships). A month or so ago on the day of an earnings report I think you sold the Dec 2012 $17.50 puts. I sold the Mar 2013 $15.00 puts. So far, so good. I sold mine at $1.20 each and they're currently at 55 cents.

2. ATI - Allegheny Technologies Inc (specialty steel). Yesterday I sold the Apr 2013 $20.00 puts and you sold the Dec 2012 $22.50 puts. We shall see... I want some exposure to this area and the trade set-up was OK: 29% OTM, IV of 51%, Delta of .14 (or 14) but I worry that I (we) might have engaged in knife-catching if we're headed for Recession II. I'm gonna watch it closely the next few days... maybe strangle it while the IV is high.
 
Quote from Brighton:

Put Master, I take a glance at this thread every week or so and on at least two occasions we've made a very similar trade, either on the same day or within a day of each other. Note: I'm not copying you; I invest/trade in a number of energy & agricultural commodities and companies and sometimes I take the "pick & shovel" approach which is why we've overlapped on these transactions:

1. TITN - Titan Machinery (farm & constr equipment dealerships). A month or so ago on the day of an earnings report I think you sold the Dec 2012 $17.50 puts. I sold the Mar 2013 $15.00 puts. So far, so good. I sold mine at $1.20 each and they're currently at 55 cents.

2. ATI - Allegheny Technologies Inc (specialty steel). Yesterday I sold the Apr 2013 $20.00 puts and you sold the Dec 2012 $22.50 puts. We shall see... I want some exposure to this area and the trade set-up was OK: 29% OTM, IV of 51%, Delta of .14 (or 14) but I worry that I (we) might have engaged in knife-catching if we're headed for Recession II. I'm gonna watch it closely the next few days... maybe strangle it while the IV is high.
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Regarding TITN, I initiated my puts on Sept 10,..... and my strike was also $15. My post is below:

<<< 09-10-12 08:21 PM

Sold puts on $15 TITN for Dec.
Credit $0.60
Annualized % return......... 14%
otm safety cushion...25%
BE..... $14.40
Good company going through a temporary difficult time, due to drought conditions. Company is also financially healthy.
A price of $15, with a BE of $14.40... is a very good value, with good tech support in the 19 - 20 area, and again down in the $15 area, if the 19 - 20 support breaks.
5 year chart below:
http://finance.yahoo.com/q/bc?s=TIT...l=on&z=l&q=b&c= >>>

As for ATI, while I like your $20 strike vs my $22.50, as there is better tech support there,.... the Dec $20 didn't have a high enough % return for me to warrant the trade.
And I didn't want to go out to April, as that means going through the uncertainty and potential volatility of 2 earnings reports. Not to mention a much lower rate of theta.

I'm glad to see I'm not out there all alone with my stock picks.
Nice to know others agree with my stocks and strike ranges.
Both of the trades you mentioned gave me a 14% annualized % return.
A lower % return than I'd like,... but I have to accept and deal with the "reality" of the current low VIX environment we are in.

I hope you'll consider posting some of your other trades going foward. Chances are I'll agree with them, and may consider them for myself as well. Our main differences thus far, are mainly just the time frame of the trades.
Other than that, your trades seem brilliant to me!:D
 
Quote from Put_Master:

Sold puts on $10 ATVI for Nov.
Credit $0.15
Annualized % return..... 12%

Thus I've now sold puts on $11 ATVI for Oct, and $10 ATVI for Nov.
Given that the 1st trade has the potential to earn 22% annualized, and this 2nd one at a lower strike, earning 12%,.... they average out to 17%.

Love the tech support in the $10 - $10.5 area... per the 5 year chart below:
http://finance.yahoo.com/q/bc?s=ATVI&t=5y&l=on&z=l&q=b&c=
More...

Just wanted to point out, today there was a bearish spike in put buying on the $10 ATVI for Dec and Jan. Mostly for Jan.
For Dec, the vol was 6,500 contracts.
For Jan, the vol was 14,000 contracts.

Someone is making a HUGE bet on the stock dropping BELOW $10 over the next 2 - 3 months.
I was considering a $10 Dec put, assuming my Nov $10 would expire.
But given this huge bet against the stock for Dec and especially for Jan, I have reconsidered.
But I do plan to allow my current Nov $10 ATVI put to expire.
But next week I may reconsider allowing it to expire, given that earnings are released Nov 7th.
 
FRX:

http://finance.yahoo.com/news/earnings-scorecard-forest-labs-212528646.html

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

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

http://finance.yahoo.com/q/bc?s=FRX&t=5y&l=off&z=l&q=l&c=

Trade:

With FRX at 34.17

Feb 35/30 bear put spread for a net debit of $200
(buy the 35 put and sell the 30 put)



Price...............................P/L.....Prob >
20.................................300......99%
30.................................300......81%
33...................................0.......56%
35................................(200).....41%
40................................(200).....12%

expectation = .19(300) - .41(200) + .25(150) - .15(100) = 57 - 82 + 37.5 - 15 = -2

Even money statistically

copied from another board
:D
 
Hi Put-

It's funny that I came to this thread after you directed me to it, and the first stock you mention is one of the last stocks I had been contemplating. Nice call BTW...

There's no doubt in my mind that ARO has more upside potential than down.

My 'Johnny come lately' thought was to wait until earnings report on NOV 29, then decide. If it's good, it should move, if it's stale or bad, then we might be able to pick it up at $10 wholesale soon after.

Nice thread- I'll keep an eye on. Thanks for your advice too :)
 
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