Selling puts on strong stocks

M

Miked0801

This journal won't be updated more than once a week or so - depnding on how well I do my job. I'll be selling puts normally or synthetically depending on premium.

Starting capitol $15000

Trades thus far:
Sold 10 Feb AMD 40 puts for 1.10 premium (when stock was around 43 3 weeks ago)

Yesterday, bought back puts for .13 premium. Profit 97x10 = $970 - (7+25) comm - $50 margin = $888 profit

Sold 10 Mar AMD 37.50 puts for .78 premium.

The reasons?

1. We have a strong uptrending stock.
2. 20 day MA support
3. 50 will become support towards the end of the month

Exit plan:
Buy back for .10 or so to roll into another month
If stock stays strong fundamentally, I wouldn't mind having the stock put to me to sell calls against. That said, if it drops 10% (and with this kind of volatility, it may), I will have to re-evaluate and hedge as needed.
 
Welcome and good luck! I think you will find a mroe option educated bunch here than on CL lol. Even if you do not have the funds to open multiple positions you can still follow candidates along with your real positions or stick in a few paper trades along the way ;)

Good luck!

P.S. Don't forget the month when mentioning a put position lol.
 
Quote from Miked0801:

This journal won't be updated more than once a week or so - depnding on how well I do my job. I'll be selling puts normally or synthetically depending on premium.

Starting capitol $15000

Trades thus far:
Sold 10 Feb AMD 40 puts for 1.10 premium (when stock was around 43 3 weeks ago)

Yesterday, bought back puts for .13 premium. Profit 97x10 = $970 - (7+25) comm - $50 margin = $888 profit

Sold 10 Mar AMD 37.50 puts for .78 premium.

The reasons?

1. We have a strong uptrending stock.
2. 20 day MA support
3. 50 will become support towards the end of the month

Exit plan:
Buy back for .10 or so to roll into another month
If stock stays strong fundamentally, I wouldn't mind having the stock put to me to sell calls against. That said, if it drops 10% (and with this kind of volatility, it may), I will have to re-evaluate and hedge as needed.
More...

Hi Mike...interesting...I'm thinking of doing an AMD put diag Mar/Apr more for fundamental reasons...is your research tech fundamental or both? thx and good luck with your trading and journal.
 
lol wait till a 9/11 happens you'll be wiped out overnight. i sell naked calls on highly volatile stocks after massive runs like goog in the mid 400's.
 
Quote from joeyata1:

lol wait till a 9/11 happens you'll be wiped out overnight. i sell naked calls on highly volatile stocks after massive runs like goog in the mid 400's.
More...

How much market fell in terms of percentage on 9/11? Is there actually anybody who was wiped out or is this just a theory?
 
Quote from osho67:

How much market fell in terms of percentage on 9/11? Is there actually anybody who was wiped out or is this just a theory?
More...

I don't sell naked calls on anything..as for 9/11 I lost my job at Continental airlines a month later 10/2001 but the end of 2001 we were actually up abt 5% on the year...2002 was big down! Even in 87 when there was a 500 pt drop and more the next day...didn't get out of the market at all and at the end of the year was up 13% (before the big drop had but up something in the 30%)...portfolio management is the most important thing...people so afraid of a "black swan" won't take the risks needed to let profits run or be agressively long when they need to be.
 
Yeah, a black swan would hurt - but I'm not leveraging myself to the point where I'd lose my house as well as my investment. As mentioned, I keep an eye on things and roll with the punches as needed. :)
 
AMD dropped over 4% and broke through 2 resistance levels. I will be closely monitoring this stock tomorrow. If it continues to free-fall, I will be forced to either roll to 35s and break-even for the month or get the heck out of the way :)

I still feel that we have a good chance of bouncing off the 50MA and there are some light support levels where we are now and at 38.20ish. Let's get a good rally tomorrow. Stupid Google.
 
Nice recovery, but too many levels were violated for me to feel comfortable near-term. On this run up, I'm purchasing 10 Mar 35 puts at .10 to convert to a bull put spread. Less exposure and more protection if the MMs decide to play "pop to stops" again. This reduces my profits a bit, but makes me feel much more comfortable.
 
You must log in or register to reply here.
Back
Top