Sold naked put on $47.50 "K" for August. Credit $0.90 Annualized % return 23 - 24% Not much of a safety cushion, but stock has excellent tech support in the $47.5 - $48 area, per the 2 year chart. Fundamentals are also good, although, I think their debt is a bit excesive. Stock also pays a nice dividend,.... if it gets put to me. http://finance.yahoo.com/q/bc?s=K&t=2y&l=on&z=l&q=b&c=
Sold puts on $11 GLW for Sept. Credit $0.26 Annualized % return.... 14% Tech support in the $11.5 - $12 area, per the 1 year chart below. http://finance.yahoo.com/q/bc?s=GLW&t=1y&l=on&z=l&q=b&c= WARNING: Earnings release tomorrow. Taking a chance, as company has a long history of meeting or beating expectations. Plus i like the companies technical support, and fundamental values at my price. Company is also financially healthy. This is my first Sept investment, as I already have about 10 for Aug. If I'm wrong about them meeting earnings expectations, at least i get paid 2 months waiting for it to recover.
Sold puts on $19 KBR for Sept. Credit $0.45 Annualized % return.... 14% Stock with tech support in the $21 - $22 area, per the 2 year chart below http://finance.yahoo.com/q/bc?s=KBR&t=2y&l=on&z=l&q=b&c= And then support again in the 19 area per the 5 year chart. Hence my selection of $19 for my strike, with a BE of $18.55 WARNING: Earnings coming out tomorrow. I'm taking a chance as i like the companies fundamentals and value at my strike, and it's tech support at and above my strike. Company is also financially healthy.
Sold puts on $13 IGT for Sept. Credit $0.30 Annualized % return.... 14% WARNING..... Earnings due out after the close. On a negative note, the number of shares being shorted have doubled over the past month. However, the % of shares being shorted remain at a reasonable 7.6% Another negative, is the company has more debt than I'd like to see. However, their "interest coverage", (ability to pay their debt), remains at a reasonable 4.3 times. Technically, I like their support in the $13 - $14 area, per the 2 year chart below. Hence my strike of $13, with a BE of $12.70 http://finance.yahoo.com/q/bc?s=IGT&t=2y&l=on&z=l&q=b&c=
Sold puts on $45 NFLX for Sept. Credit $0.90 Annualized % return.... just under 13% This is a pure technical trade, per the 5 year chart: http://finance.yahoo.com/q/bc?s=NFLX&t=5y&l=on&z=l&q=b&c= If it drops below my $45, I'm hopeful it can be "neutralized" via covered calls.
Not to be critical, but why not trade the ATM juice? You could trade large caps in ATM spreads and combos and do far better as a % of debit req and not trade naked in a hyper-vol issue. Just IMO.
I'm Batman! BTW, thought the movie was long, boring and stupid. This was the worst in the series. Liked the first 10 - 15 minutes and the last 10 - 15 minutes. Now, about the middle 2 hours and 20 minutes....... long, boring and stupid.
I agree with the premise. But I don't like the idea of losing control of my trades with a spread. I know that sounds weird, but I mean it in the context of not being able to buy most spreads that go just a little bad between or below both strikes. Of course that assumes I was hoping to make more than $100 on the trade. I sold 6 contracts making $540. To make even half that amount I would have needed to sell substancially more spreads. Since I could not buy that much stock, if it went between or even slightly below a $45/42.5 spread, i would have needed to close it for a max or near max loss. With a put, it can drop 35 - $40 and I'll still make money owning the stock with covered calls. I don't like the idea of dumping stocks at good prices. I can't own the stock if i want to make any money with a spread. HOWEVER, I am NOT suggesting others consider this trade. Going naked is risky and i know it. But then again, my $44.10 BE price is sooo far below where analysts and investors liked it, my price is not that unreasonable, considering I can drop my BE price below $40 with calls if it comes to that. I like the tech support I see in the $45 - 50 area, per the 5 year chart. Hence my willingness to take a chance going naked on an extremely volatile stock. I had it on my watch list for $60 for quite a while. Once it tested the $58 area, I decided to take a chance. But I agree it is a risky trade. What is it you would have recommended for a $45 strike?