My OPTION TRADES..... part 2

Put_Master · Nov 29, 2012

<<< PM, upon re-evaluating this call idea with your put sells,
I would have to say its a bad idea.
You are so amazingly accurate in your put selling, that the incredible sloppyness of straight call buying would be an insult to your accuracy and methodology.
This makes no sense to experience this kind of worry and drawdown when your original put sell was doing just fine.
I believe now, after running this test example of your last trade, it isn't worth the risk of buying calls.... Jeff >>>

Thank you for taking the time to analyze my trade, and sharing your opinion regarding my adjusting my strategy to include buying calls.
Really appreciate it.
Time to go back to work looking for puts to sell.
Hope to have something to share later.

Put_Master · Nov 29, 2012

Sold puts on $27 PAY for Dec.
Credit $0.45
Annualized % return.....27%

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

Stock is reasonably priced at my $27 strike, with a BE price of $26.55.
otm safety cushion.... 11%
My main issue with the company is it's debt load. They are able to meet their debt obligations with no problems, but I'd like there to be more of a safety cushion.
However, given that this is a 3 week trade, it's not that big of a concern.
However, be aware they report earnings about a week before the contract expires.

probe1957 · Nov 29, 2012

Quote from jeffalvinson:

and the chart is crying out,
"I'm going up, anybody coming aboard?" (like INTC)

While I do think INTC is a decent buy at current level, I wouldn't buy until I see some sign that the market agrees. May I ask what you see in the chart that indicates it is "crying out, I'm going up?"

jeffalvinson · Nov 29, 2012

Quote from probe1957:

While I do think INTC is a decent buy at current level, I wouldn't buy until I see some sign that the market agrees. May I ask what you see in the chart that indicates it is "crying out, I'm going up?"

The charts show strong 2 year support at 19, but after today's price action in INTC, I have jumped over to Put Master's camp.
He says it needs another solid test at 19 and at this point I totally agree with him.

FrankSlaughtery · Nov 30, 2012

Quote from probe1957:

While I do think INTC is a decent buy at current level, I wouldn't buy until I see some sign that the market agrees. May I ask what you see in the chart that indicates it is "crying out, I'm going up?"

+1. i aggressive traders could get long above 20.19 (the recent swing high) or conservative traders would wait for a break of the 50 dma and maybe a retrace to it. price has been below the 50 dma since 8/21 when it was about 26.

probe1957 · Nov 30, 2012

I agree with Jeff in his contention that INTC needs to retest 19 to see if that support level will hold. It has tested 19 a couple of times on the two year chart then bounced up for a nice run. It is well on its way to testing 19 again. The question again is, will 19 hold? Yesterday's PA reconfirmed my opinion that I don't want to enter a long position here.

oldnemesis · Nov 30, 2012

Put_Master · Dec 1, 2012

Quote from jeffalvinson:

The charts show strong 2 year support at 19, but after today's price action in INTC, I have jumped over to Put Master's camp.
He says it needs another solid test at 19 and at this point I totally agree with him.

My GTC order is already in, to sell a Jan $17.5 put on INTC.
Stock needs to test $19 to get the credit I desire.
But I'm not chasing anything.
If INTC doesn't re-test the support area i think needs re-testing, perhaps another stock will.
There are enough stocks sectors and stocks within those sectors,... that there is no need to chase anything.
If INTC doesn't test the support I desire, so I can select the strike and credit I desire,... perhaps another stock will.

jeffalvinson · Dec 2, 2012

Quote from Put_Master:

My GTC order is already in, to sell a Jan $17.5 put on INTC.
Stock needs to test $19 to get the credit I desire.
But I'm not chasing anything.
If INTC doesn't re-test the support area i think needs re-testing, perhaps another stock will.
There are enough stocks sectors and stocks within those sectors,... that there is no need to chase anything.
If INTC doesn't test the support I desire, so I can select the strike and credit I desire,... perhaps another stock will.

PM,

Are you thinking .25 to .26 put sell credit when INTC hits 19?
If it does hit 19, I might very well buy a few Jan 17.5 calls just to see what happens. However I won't take a beating if it keeps dropping. Bracket order with buy limit entry when INTC hits 19 / sell limit at entry +40% / stop at entry -20%.

Jeff

Put_Master · Dec 2, 2012

Quote from jeffalvinson:

PM,

Are you thinking .25 to .26 put sell credit when INTC hits 19?
If it does hit 19, I might very well buy a few Jan 17.5 calls just to see what happens. However I won't take a beating if it keeps dropping. Bracket order with buy limit entry when INTC hits 19 / sell limit at entry +40% / stop at entry -20%.
Jeff

My Jan $17.50 INTC order is in for $0.33.
But stock needs to drop more for my order to get hit.
I want an annualized % return on my trades, to be in the "teens".

Off Topic:
For those who may have missed this a couple of years ago, it's worth a few minutes of your time....
http://www.youtube.com/watch?v=ggyhlc5NXlM