Trading Journal - June

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Originally posted by Seanote
Short 3K CYMI @ 36.99

* This could be a long term hold ( up to 2 months)
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Notice the OI on the Aug 25 Puts vs. today's volume. Some firm or service has put out a blanket recommendation on that option. The option itself is juiced enirely too much to open right now. This firm thinks the stock (trading at $37) right now will drop at lease $12 over the next 2 months. Just a heads up.
 
If you feel that a drop is coming in the stock why would you limit your downside? Taking in $1.45 will not do much for you on the upside?? Would you do better buying a call against your short stock. Just curious ...
 
re. CYMI, 60 min chart says it hit bottom and may revert up. I hate to join the crowd. What the stop loss on this - 37.55?
Good trading.
 
Originally posted by moffitt
If you feel that a drop is coming in the stock why would you limit your downside? Taking in $1.45 will not do much for you on the upside?? Would you do better buying a call against your short stock. Just curious ...
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That's why I'm only selling the June puts. I feel the drop will happen after June's expiration. Buying a call would be a protective strategy that I'm not interested in. By selling the put I would receive additional income and my breakeven would be about $38 if CYMI moved against me. I think this is an ideal time to sell the put, make about $4K and hope I'm not assigned by June's expiration. Keep in mind how juiced the June puts are... June 21st is expiration.
 
Also, notice that CYMI is positive and people are still buying the puts. The Aug 25 puts are still up considerably when the stock is moving against them.

My stop is in the $40 area. I'm giving myself a larger cushion on this play.
 
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