Put Master, I suggest you read a website/blog called Citron Research by a guy called Andrew Left. He has written two or three negative posts on NUS in the last six months. You'll need to make up your own mind, but Andrew Left (the guy behind Citron) has a pretty good strike rate as a short seller. - check out his wikipedia page.
Thanks for the feed back. I'll check it out. Given that the price of NUS was considerably higher over the past several months, I am inclined to agree with him. But has he written any opinions with the price of NUS in the $40 or lower area? Not to mention it's 2.3% dividend which he is paying.
Speaking of dividends, today NUS announced they will be increasing their dividend from $0.20 to $0.30. That is a sig % increase. Given that insiders own about 11% of the company, that dividend increase is not too surprising. Hopefully it will also help support the stock price from dropping below $30.
While 5 months is nothing to be pleased about, as it represents 5 potential trades for that particular unit of cash,... it's still more than 50% better than your initial numbers. I just wanted to clarify those numbers. In terms of the probabilities you discussed above, if you are refering to using probability calculators, I consider them somewhat useless for basic naked put selling. They are a "one size fits all" contraption If I plug in the exact same numbers for 2 different stocks, I will get the exact same calculated response... even if one stock has zero tech support at that strike, and the other has dozens of times it successfully bounced off that strike.... (to use just one example.) If someone needs a prob calculator to evaluate the probability of a basic trade being successful, that is a cause for concern. One really should be able to use basic common sense and analysis, to evaluate the prob of a trade being successful. And the longer the trade is, the more meaningless the prob calc is. I think they risk giving investors a false sense of security (probability). Just my opinion.
You don't get it. I am referring to the pricing of touch options (first gen exotics). The prob of touching the KO barrier under a risk-neutral measure (you choose one). That probability is = the delimited payoff, n/100.
Of course I don't get it. I rarely understand what you are talking about. My responses are more often based on assumptions of what you are refering to, vs the reality. Occasionally I get lucky.