Trade of the day

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Nov 10, 2008 5:26 pm

Well it seems I have quite a good thing going on. Just for fun I'll post what I consider to be the best trade I did on a given day.

 
Today was selling cash secured puts, GE December 15 for .72 to open. Easy money and if GE gets to 15 I'll take it with a 14.28 basis that should also make the dividend in the 8% range. 
Nov 10, 2008 5:36 pm

Forgot to add there is an 82% probability that this will expire worthless. We do want the stock, but if not we get paid to be wrong.

Nov 10, 2008 6:04 pm

Would you be pissed if GE opens at $2.625? 

Nov 10, 2008 6:08 pm

If something like that happens I would 'roll' it. There is plenty of chain for profit management. So no not really would just manage the position. Was 48 for 48 profitable expirations last month. My system was crash tested and all was well. Will have 70 something this month.

Nov 10, 2008 6:17 pm

I see... you SOLD the puts. I misread your original post to say that you BOUGHT them. My bad. 

Nov 11, 2008 5:13 pm

Altria cash secured put MO Dec 17 1/2 for 1.26, Hope/planning to get the stock on this one. Don't see asians stopping smoking anytime soon with a 16.24 the div will be above 7.5% 

Nov 11, 2008 6:21 pm

FYI All funds used for cash secured puts are put in TBills until expiration. If I buy back the option I just leave the cash in TBill as it's considered cash by margin.

Nov 11, 2008 6:30 pm

How about buying CHK at 22.36 and writing the Jan 09 calls at 27.50 for 2.  Pocket the $200 and get called away with a 23% profit.  You also will get the divi from the stock.

 
With Obama becoming prez, you could do this all year long while owning a nat gas company, which is a form of energy he supports. 
Nov 11, 2008 7:39 pm

Not on My radar but I'll check it out. I trade overwrites all the time. Not a lot of premium on the call side for the last month or so that one sounds very nice.

Nov 11, 2008 10:11 pm

I can't tell these guys how proud I am to know that there are still smart guys around who are not afraid to suggest "zany options trades" to their clients.


You guys make me and my mentor LeRoy Gross proud.





Nov 11, 2008 10:43 pm
Provocative Put:

I can't tell these guys how proud I am to know that there are still smart guys around who are not afraid to suggest "zany options trades" to their clients.


You guys make me and my mentor LeRoy Gross proud.





 
I thought you hated me...
Nov 12, 2008 9:18 am

I have never used options before(frmr EDJ) where is a good place to start to learn how to, so I can add it to my business..

Nov 12, 2008 5:03 pm

Prov,

Zany? I guess your not a fan of probabilities and getting high quality dividend paying stock at a discount.
Nov 12, 2008 5:09 pm
Gaddock:

Prov,

Zany? I guess your not a fan of probabilities and getting high quality dividend paying stock at a discount.
 
Gad, I think you read his comment a little too quick.  He actually thinks what you're doing is the best thing since sliced bread.
 
I do, however, think "zany" was an odd choice for an adjective in his sentence, which might have been what threw you off.
Nov 12, 2008 5:15 pm

Beyond that these "zany" trades are appropriate for errisa account... yawn.


Trade of the day ... Bought back a APA Nov. 95 for .15 from .95 to close. Yes I know it expires a week from Friday, I needed the margin to free up some cash.

Nov 12, 2008 5:16 pm

Snags thanks for the clarification, please dont take what I said as negative.

Nov 12, 2008 5:22 pm
chief123:

I have never used options before(frmr EDJ) where is a good place to start to learn how to, so I can add it to my business..

 
Covered Calls, if you can find any premium. Dont go for the big credits and try to keep the delta in the 90's, above overhead resistance and three standard deviations on the strike price. Dont go out beyond 60 days for the most part as the time value drops off quick (your best friend).
 
Be sure it's a price your client would be happy to sell the stock for as well.
Nov 12, 2008 5:33 pm

Prov,

When you speak of LeRoy Gross are you speaking of the man or his books?
Nov 12, 2008 8:56 pm
Gaddock:



Prov,

When you speak of LeRoy Gross are you speaking of the man or his books?





Both.  The man could sell ice to eskimos, or is it eskimoes?

Nov 13, 2008 12:21 pm
Provocative Put:
Gaddock:


Prov,

When you speak of LeRoy Gross are you speaking of the man or his books?



Both.  The man could sell ice to eskimos, or is it eskimoes?

 
Not to mention sand to the sand man, ice to the ice man ,and pussy to the Navy.
 
Leroy was the man!