price action = PA, no tools can be trusted other than PA
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My option trades
- Thread starter ryanpatrick
- Start date
As an update....Quote from Put_Master:
Sold naked puts on $17.5 WMS for August.
Credit $0.30
I tried geting $0.35, but didn't get filled.
Annualized % return on the trade.... 17%
Stocks fundamentals are mixed, but overall reasonable.
Tech support at or above my strike is also reasonable.
I probably should have waited for the stock to drop a bit more and perhaps test 19, but I wouldn't get much more credit for it, and thus not worth the risk of missing the trade, or losing a weeks time decay over an extra $0.05
The L-T downside risk I see is about $16, and a covered call would take care of that issue.
This $17.5 WMS trade was put to me.
I then sold a $17.5 Jan covered call for $1.00
Today I closed the Jan covered call for $0.30, thus keeping $0.70.
Thus my current BE price is $16.50. (Put credit $0.30 and call credit $0.70)
I plan to sell a Jan $15 call if/when the credit pays $1.55
If the order is filled, my new BE price will be $14.95
Thus, essentially breaking even on a deal gone bad.
I'd rather lose time than money. Although, I am losing out on money I could have earned during that unit of time, if the trade had not gone bad.
Quote from Put_Master:
As an update....
This $17.5 WMS trade was put to me.
I then sold a $17.5 Jan covered call for $1.00
Today I closed the Jan covered call for $0.30, thus keeping $0.70.
Thus my current BE price is $16.50. (Put credit $0.30 and call credit $0.70)
I plan to sell a Jan $15 call if/when the credit pays $1.55
If the order is filled, my new BE price will be $14.95
Thus, essentially breaking even on a deal gone bad.
I'd rather lose time than money. Although, I am losing out on money I could have earned during that unit of time, if the trade had not gone bad.
Further update.... part 2:
Having closed my earlier one dollar, $17.5 Jan covered call trade above for $0.30 (keeping $0.70),... today I sold the Jan $15 covered call I discussed above for $1.50.
Hence, my new break even price, on this initial deterioating $17.50 naked put trade, is now $15.
If the stock is above $15 in Jan, my only loss will be the time I wasted, and my commissions.
A small price to pay for a trade gone bad.
If the stock is not excessively below $15 on exp day, I can still turn this trade into a profitable one, vs it's current BE status.