What do you guys think of this naked put trade? I havent entered it, just looking. ENZ @ $12.76 Sell May 12.50 Puts @ $1.15 1 year chart looks good, but the last 6 months has me worried. Range bound and VERY expensive options, something is up.
Selling naked is really a bullish play...you don't mind owning the stock because even if it does drop you believe the fundamental's are sound and it will go up eventually. I took a quick peak at the "stock grader" feature of my barron's on line subscription and they have it as a sell with very poor fundamental's. In that space they have GILD are a buy so you might try a bull put spread on GILD instead of just selling naked...you may not realize as much but you at least probably won't end up owning a sucky stock! While I don't buy a stock based on a positive rating from a single source...a negative report will usually put me off. There is too much opportunity out there to waste your time and money on a risky issue imo. good luck tho
It's almost ATM. A bad market pullback will easily put you ITM and you'll end up owning this POS or at a loss on the put.
I think it is an absolutely fantastic trade. If you keep this up, I know that in the future we will be hearing about your great success. I think you must be one of the true genius' of modern trading to have figured this approach out. I know that none of the traders here would have been able to pull this off. What an imagination! I think you should go for it. Really step on the gas. Really kick some ass. Really put the pedal to the metal...If you have a home, I suggest you put on a big second mortgage, borrow from your relatives, knock off a couple of convenience stores, and sell drugs and the sexual services of both male and female family members. In fact, why not go all the way and sell your kidneys, one or both of your nuts and at least one eye (after all you have two). With a little luck, you should be able to raise nearly a million bucks for your trading account (testicle transplants are said to be very lucrative). I cannot wait to hear more about this in future. Steve
I think I will paper trade this one and see how it goes, this stock must be ready to move with those expensive options. ENZ @ $12.84. Sell May ENZ 12.50 Put @ $0.90
"Steve.....sarcasm is the lowest form of wit." But it's very funny and entertaining - I'm still rolling around on my floor! daddy's boy
yes...the big ? is how far and how fast. His BE point is 11.60...so as long as stock doesn't close below that by May exp he is not out any $$. The trick with these high volatile cheap stocks is that stock could easily go to 11. OR lets say it closes at 12.30 option's exp Fri and the stock is put to him...he's ok if he can get out of the stock on Monday or Tues and not have it gap down to 10.90:eek: Its difficult to plan for and execute your plan for a highly volatile stocks... so many out there will nail you six ways to sunday! Essentially it's high risk/high reward /low probability of profit. If you have money you want to throw at it and think the stock is fundamentally sound and can withstand ppl's opinion of it...fine or as he is doing make it a paper trade...much cheaper lesson