Just curious, Are these bought or sold puts?
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My OPTION TRADES..... part 2
- Thread starter Put_Master
- Start date
Just curious, Are these bought or sold puts?
I only sell puts.Quote from Hoofhearted:
Just curious, Are these bought or sold puts?
My goal is simply to select prices i think the stock will not drop below, during the length of my contract, while I let time decay work it's magic.
My current goal is to earn a 13 - 15% annualized return per trade.
When the VIX gets back into the 20's I'll raise my % goal.
Given our current low VIX environment, a 13 - 15% return seems reasonable.
That % goal is in the "context" of setting up the trades to have a very high probability of being sucessful.
If I raise my current % goal, that will have the negative affect of lowering the probability of the trade being successful.
Thus, I'm waiting for the VIX to rise, before I raise my % return goal.
Quote from Put_Master:
I only sell puts.
My goal is simply to select prices i think the stock will not drop below, during the length of my contract, while I let time decay work it's magic.
That's kind of what I gathered.
Has this always been your strategy, or was there ever a day where , like me, you bought directional calls or puts?
I never bought anything.... other than when part of a spread.Quote from Hoofhearted:
Has this always been your strategy, or was there ever a day where , like me, you bought directional calls or puts?
I prefer having time decay working for me than against me.
Also, while there are times i think a stock is likely to move up or down, i really have no idea how soon that move will occur, or how large a move up or down will occur, or when it will stop moving up or down and reverse.
Thus, i don't place bets on any of that stuff happening.... particularly when time decay is working against me.
I think buying puts and calls sounds better in theory , than how it tends to work out in reality.
I forgot to post that I sold a put on $57.5 NSC friday.
Credit $1.40
Annualized % return ....20%
Not much otm cushion.
But very reasonable tech support in that area per the 5 year chart.
If it breaks, next support around $55.
Stock pays a dividend of 3.5% at my break even price of $56.10.... and that should help support the stock price of this reasonably priced financially healthy company.
Credit $1.40
Annualized % return ....20%
Not much otm cushion.
But very reasonable tech support in that area per the 5 year chart.
If it breaks, next support around $55.
Stock pays a dividend of 3.5% at my break even price of $56.10.... and that should help support the stock price of this reasonably priced financially healthy company.
HD:
http://finance.yahoo.com/news/earnings-preview-home-depot-150920635.html
http://finance.yahoo.com/q/ks?s=HD+Key+Statistics
http://investing.money.msn.com/investments/financial-statements?symbol=HD
http://finance.yahoo.com/q/bc?s=HD&t=2y&l=on&z=l&q=l&c=
Trade:
Feb 50/45 bull put spread for $25
Yield = 25/475 = 5.26% in 95 days or 20% annualized
Prob = 94%
Expectation = .94(25) - .01(475) - .05(237) = 23.5 - 4.75 - 11.85 = 6.9
price..............................P/L.............Prob>
45...............................(475).............99%
49.75..............................0................95%
50..................................25...............94%
55..................................25...............77%
(copied from elsewhere)
http://finance.yahoo.com/news/earnings-preview-home-depot-150920635.html
http://finance.yahoo.com/q/ks?s=HD+Key+Statistics
http://investing.money.msn.com/investments/financial-statements?symbol=HD
http://finance.yahoo.com/q/bc?s=HD&t=2y&l=on&z=l&q=l&c=
Trade:
Feb 50/45 bull put spread for $25
Yield = 25/475 = 5.26% in 95 days or 20% annualized
Prob = 94%
Expectation = .94(25) - .01(475) - .05(237) = 23.5 - 4.75 - 11.85 = 6.9
price..............................P/L.............Prob>
45...............................(475).............99%
49.75..............................0................95%
50..................................25...............94%
55..................................25...............77%
(copied from elsewhere)
Quote from oldnemesis:
HD:
http://finance.yahoo.com/news/earnings-preview-home-depot-150920635.html
http://finance.yahoo.com/q/ks?s=HD+Key+Statistics
http://investing.money.msn.com/investments/financial-statements?symbol=HD
http://finance.yahoo.com/q/bc?s=HD&t=2y&l=on&z=l&q=l&c=
Trade:
Feb 50/45 bull put spread for $25
Yield = 25/475 = 5.26% in 95 days or 20% annualized
Prob = 94%
Expectation = .94(25) - .01(475) - .05(237) = 23.5 - 4.75 - 11.85 = 6.9
price..............................P/L.............Prob>
45...............................(475).............99%
49.75..............................0................95%
50..................................25...............94%
55..................................25...............77%
(copied from elsewhere)
Good company, with a history of meeting or beating earnings expectations.
But trading just 2 points off its all time high of $63.20... with earnings coming out tomorrow, and tech support considerably below where it's currently trading.
Seems like a potentially risky trade, but lets hope for a good earnings report tomorrow. Good luck.
"But trading just 2 points off its all time high of $63.20... with earnings coming out tomorrow, and tech support considerably below where it's currently trading.
Seems like a potentially risky trade, but lets hope for a good earnings report tomorrow. Good luck."
Well... where you see support depends on what chart you are looking at:
This is a 90 day trade so one might look at the 90 day chart:
http://finance.yahoo.com/q/bc?s=HD&t=3m&l=off&z=l&q=l&c=
A 180 day chart (twice the length of the trade) shows support right in the trade level:
http://finance.yahoo.com/q/bc?s=HD&t=6m&l=off&z=l&q=l&c=
A five year chart really is unrealistic for finding 'support levels' on a stock that has had recent success:
http://finance.yahoo.com/q/bc?t=5y&s=HD&l=off&z=l&q=l&c=&ql=1
... making the assumption that you believe in 'support levels' in the first place.
Actually, other than that, I agree with you. This is the best trade I could come up with for HD considering it's pending earnings report this AM.
If I wanted to play the report without too much risk this would be what I would do... although a long, Dec ATM call would also be a good short term trade... especially with the VIX so low.
Since it is a 'good company' there is some element of being willing (or even anxious) to be put and let HD become a part of my income portfolio and collect dividends and write calls.
As it is, I'll be watching the outcome to see if either the market or the stock offers a better opportunity over the next few days.
The best opportunity might actually be if HD misses slightly on earnings and takes a little plunge... but then the issue will be if this is a market where one wants to invest at all given fiscal cliff etc.
When looking at someone else's trade it pays to look at things with a broader perspective than you own narrow trading strategy.
Seems like a potentially risky trade, but lets hope for a good earnings report tomorrow. Good luck."
Well... where you see support depends on what chart you are looking at:
This is a 90 day trade so one might look at the 90 day chart:
http://finance.yahoo.com/q/bc?s=HD&t=3m&l=off&z=l&q=l&c=
A 180 day chart (twice the length of the trade) shows support right in the trade level:
http://finance.yahoo.com/q/bc?s=HD&t=6m&l=off&z=l&q=l&c=
A five year chart really is unrealistic for finding 'support levels' on a stock that has had recent success:
http://finance.yahoo.com/q/bc?t=5y&s=HD&l=off&z=l&q=l&c=&ql=1
... making the assumption that you believe in 'support levels' in the first place.
Actually, other than that, I agree with you. This is the best trade I could come up with for HD considering it's pending earnings report this AM.
If I wanted to play the report without too much risk this would be what I would do... although a long, Dec ATM call would also be a good short term trade... especially with the VIX so low.
Since it is a 'good company' there is some element of being willing (or even anxious) to be put and let HD become a part of my income portfolio and collect dividends and write calls.
As it is, I'll be watching the outcome to see if either the market or the stock offers a better opportunity over the next few days.
The best opportunity might actually be if HD misses slightly on earnings and takes a little plunge... but then the issue will be if this is a market where one wants to invest at all given fiscal cliff etc.
When looking at someone else's trade it pays to look at things with a broader perspective than you own narrow trading strategy.
<<< When looking at someone else's trade it pays to look at things with a broader perspective than you own narrow trading strategy. >>>
Below is the exact quote I posted refering to your trade, vs the cut and edited one you said I said:
"Good company, with a history of meeting or beating earnings expectations.
But trading just 2 points off its all time high of $63.20... with earnings coming out tomorrow, and tech support considerably below where it's currently trading.
Seems like a potentially risky trade, but lets hope for a good earnings report tomorrow. Good luck."
My statement above had nothing to do with my own narrow trading strategy.
I merely stated several correct observations which I shared.
That it was a good company.
That it had a history or meeting or beating earnings expectations.
I informed readers that earnings were coming out tomorrow.
That it was trading just 2 points off it's all time high, as earnings were pending.
To be alert that it's tech support was considerably below where it was currently trading.... given that earnings were coming out tomorrow. Thus making it a "potentially" risky trade.
I then hoped for a good earnings report for you, and wished you luck.
What does any of that have to do with my own narrow trading strategy?
I post my trades for others to observe, analyze, discuss, criticize,....
And that is what I did regarding your trade.
Merely shared my observations. Positive and potentially negative.
Below is the exact quote I posted refering to your trade, vs the cut and edited one you said I said:
"Good company, with a history of meeting or beating earnings expectations.
But trading just 2 points off its all time high of $63.20... with earnings coming out tomorrow, and tech support considerably below where it's currently trading.
Seems like a potentially risky trade, but lets hope for a good earnings report tomorrow. Good luck."
My statement above had nothing to do with my own narrow trading strategy.
I merely stated several correct observations which I shared.
That it was a good company.
That it had a history or meeting or beating earnings expectations.
I informed readers that earnings were coming out tomorrow.
That it was trading just 2 points off it's all time high, as earnings were pending.
To be alert that it's tech support was considerably below where it was currently trading.... given that earnings were coming out tomorrow. Thus making it a "potentially" risky trade.
I then hoped for a good earnings report for you, and wished you luck.
What does any of that have to do with my own narrow trading strategy?
I post my trades for others to observe, analyze, discuss, criticize,....
And that is what I did regarding your trade.
Merely shared my observations. Positive and potentially negative.