[Kikib]

Good discussion. My main reason is capital that is tied up in an IRA account. Naked puts have to be cash secured. Even if I wanted to,selling naked calls isn’t possible due to regulatory laws. So we cannot do what we want with our own money – I guess you can see how I feel about that.

As I learn more about this, quite frankly, being a “good soldier” who put every dime possible into tax deferred accounts was not the best decision – unless when I worked for a company that offered a matching 401K – then it made sense but we did much more than that and feeling the pain now that our income is much lower.

But you can’t turn back the clock and Teddi is my life support! Learning options is the best decision I ever made and taking our money away from the financial planners that cost us so much.

[Kikib]

My approach is selling puts that may or may not get assigned. Any way I look at it, it will reduce my CB alot. I have sold many shares at a loss because I think selling puts is a more efficient use of my capital..

That may not be Teddi’s solution but think she would agree – I have the puts laddered since in my case, it can only improve where I am at now.

I understand that you are not in the same situation, but I woke up to be assigned 1000 shares at I believe, would need to look at my records, $61/share!

Plus I had a few hundered shares before that at a CB that was higher. I started to sell them around $50 so you can see where I am at.. my biggest loser to date NOW but this is patience I believe.

I also started trading ABT as a stock to help reduce with BMY losses. The stock has had high volatility and so far it is helping. I will continue to look for other companies in the same industry.

MRK which is the “reason” for this, hasn’t been that interesting to me. Not to mention, the entire ordeal is way over done – I am really learning how the media can get the wrong and/or misleading information that sends the emotional investors running.

With any luck :), I will be writing a year from now that I have made a profit!

Good luck to you as well.

[Kikib]

Thx to both of you and didn’t like the MRK idea BUT did sell some of my BMY and did your trade in INTC – I have a successful “long synthetic” in INTC for many mos. with the plan of owning the stock at zero CB come Jan – assuming it stays where it is now which is very low.

So thanks – don’t write too often here but when I do, it’s typically emotionally driven and I know better.

So no issues here – today was just fine and even if it weren’t, Teddi – what I have learned from you??

I am confident knowing that all will be fine and once again, thx TEDDI!

[Kikib]

I am still considering selling part of BMY shares in exchange for MRK put selling. I would also be interested in your opinion – I may just close a majority of my position in BMY tomorrow.

Teddi – when I found you over 2 yrs. ago I think? The “wizard FPs” left us holding major losers – I am no longer a passive investor! I learned alot because of what they did but I am done paying tuition.

I have learned that sometimes, if too much capital is at stake, it’s better to move on to a better opportunity!

I can’t believe all you do and I think you know I am a straight shooter – I say what I mean.

So I would like your opinion on the switch to MRK and get out of some of BMY – I don’t like holding as much stock as I have.

Thanks from fan club here in Panama,
Valerie

[Kikib]

Thanks emnitrader – I have done 3 out of the 4 you said (with the strikes that meet my CB criteria) – great minds think alike :) but would never tie up all the shares with an option – have to keep the flexibility as you said!

[Kikib]

100% agree emintrader. Keeping trade size small is the key to risk management. I just don’t like to have any one equity taking up 10% of my portfolio – that’s where I am at.

I accepted shares on some ITM puts because of the premium I collected made it worthwhile at the time. Plus, I don’t think BMY will be going under…

All was fine until the news yesterday – it’s part of trading and items that you cannot predict – although I knew something was up because the Implied Volatility had increased dramatically over the past few weeks. Sometimes that’s good as net sellers – sometimes it goes against you – this time it did.

Teddi –
I came up with a few ideas last night and did a complete analysis of BMY – just need a bounce to BE. I am looking at taking approximately 1/3 of my BMY position and selling Credit Put Spreads on MRK. While the premiums in BMY will be better because of the volatility, MRK looks set to take off as you said. I rolled all my BMY ITM puts and came up with a net credit as far out as Jan 2018. Now I plan to sell a few Covered Calls on some of the shares – OTM but not at my CB since it’s going to be a while before it gets back to ~ $60 I believe. Your thoughts?

Thanks,
Valerie

[Kikib]

Thx Teddi – appreciate all you do. I am just feeling “too many eggs” in one basket – that’s all and surely can wait for your ideas.

Let’s face it – nobody “made” me make the trades in BMY! I just know that you will have some alternatives – already followed your advice earlier today and although my put spreads weren’t that bad but like you, I don’t want to own any more stock! So,I rolled took credits far out, and just took a small loss like you to reduce capital requirements. It’s part of what we do! But you have taught me how to recoup and because my put spreads were tight, I was able to “fix” most because the long side was Seeing a decent profit so I was a little creative.

Thanks – I have learned (maybe I should trying to learn) to not be impatient – BMY is not going to blow up the account – but your idea of transferring the capital is exactly what I was thinking..

Thanks – I believe (know) I have said this before – you have taught me so much!!

[Kikib]

Hi Teddi,
I actually came into the forum today to ask what you described above – maybe selling shares of BMY and using MRK.

My biggest issue is that I own too many shares which is tying up too much capital in an IRA account. I have managed to recoup some of the losses with covered calls and put spreads, but I am not comfortable owning the BMY shares I have at an avg. CB of $59.74.

So I am looking forward to your strategy on utilizing MRK or another similiar equity to reduce my exposure in BMY.

Thank you,
Valerie

[Kikib]

I am waiting for that day Amy :) Still learning especially since I changed platforms!

[Kikib]

I rolled my Aug 19 $65 Puts today but will take assignment on the $62.50 expiring Friday assuming the stock doesn’t continue going down. The premium I collected s/b enough to write some CCs and get assigned out of the stock with a profit.

If today is an indication, we may be seeing the rally run out of steam? I had to let my VIX Longs expire worthless – just a little too early! Sooner or later, it’s approaching what happened on Aug. 24 last year. Will history repeat? Who knows but sooner or later volatility will increase. BTW – this may have little to do with the topic here BMY.

[Kikib]

Hi Teddi and all,
I have been a member long enough to feel confident in Teddi’s opinion on BMY. This entire issue seems to be way out of proportion – I read several articles about it over the weekend and if you read in depth, it was an entirely different patient population that caused the trial results to be a “failure”? MRK hasn’t performed this study on their competitive product. However, whatever is written? Most don’t get past the headline.

I never did get into the $70 puts but did pick up $65 puts and some $62.50 puts for and Aug. 19 expiry.

The analysts downgrade today? Well that is kind of typical of analysts isn’t it? For me it was a buying opportunity to pick up some more shares (a few on Fri. and more today).

I am about at my max of capital that I will allocate to this series of trades. So at the moment, I feel like this is the kind of opportunity that I have been waiting for and was there in time to take advantage of it!

This may require some patience, but I don’t see this being anything but a dip from a solid company that will recover.

Plus thanks to Teddi, I know how to recoup the $$ from various option strategies anyway!

[Kikib]

Looks like most of us should be OK but we all seem to be in different trades. I am short the $86 Aug 19 puts and the $85 Sept 16 Puts as well. This is not typical for me especially now since I don’t like going out mare than a month on any trade right now.

It could get a little dicey but plenty of time to make adjustments if required. I would have to review my notes but it was a “Modified Teddi Trade”!

[Kikib]

Hi Teddi,
Question on Tommorow’s Trade July 8 $44.50/40.50 Put Spread Your article indicated the if they miss earning on 7-15, the stock could pull back to $44. Assuming they miss:

1. Would own the stock if assigned?
2. Or a bounce a week later assuming earnings are bad?
3. Or both?

So is it Door #1, #2, or #3 LOL. You have said in the past the $44 valuation is excellent for the stock but with uncertainty in the markets seem to lie ahead.

Thank you!

[Kikib]

OK – sanity check here.. Even though this whole bull run seems artificial, you can’t be overly bearish nor IMHO, hold any trade too long – if you have a good profit- take it off!

Funny, but my original goal and still is ?? to walk away, make my trades, have conditional orders, alerts, blah, blah…

Geez- I have gotten “sucked in” and not a bad thing, because I am so happy about what I have learned!

Thanks to all that have helped me on my journey to freedom -that’s all money is to me!

[Kikib]

Hi Amy,
I don’t post here often, but I do follow you and your insight – I sincerely appreciate your honesty and have learned a lot from you (and Teddi of course).

I have taken on a challenge (managing 4 accounts and each with a different objective), but I am determined that it has/will pay off.

It helps me and I still consider myself a newbie, to know that sometimes we just make a mistake and enter a trade wrong!

I am learning how to slowwww down. Most of my losses are because either I didn’t understand the strategy or I made the wrong one!

Thanks!
Val

[Kikib]

Hi Putrookie,
I actually had set up a regular iron condor (as in rec’d a credit) at least 2 weeks before Teddi’s reverse iron condor. Lesson once again to be learned by me – Make sure that you know if you are making a trade during earnings!

It worked out OK for me and if you had/have the reverse iron condor I would think you should do well – I just don’t remember the specifics.

My attitude right now (not that it shouldn’t always be this) is don’t get greedy and you have a decent profit – take it assuming you are actively managing your investments. Especially now that I am learning that this has been a very difficult market to trade for the last year or so.

I am still learning and that will never change. But thanks to Teddi, I was able to reduce my learning curve considerably and analyze a trade to see if it is a fit for my portfolio and not just use Teddi’s – although I do use many of them :).

Hope this helps – for me it’s easy to get confused with some of these trades – to the extent that I accidently created a new condor in AMZN on Fri that expired on Fri too! Another lesson to be learned – don’t hit the confirm until you are sure you are making the right trade. All I can say is I was just fortunate that I didn’t incur a loss since that was not at all a good thing to do!

As must be obvious, since this is Sunday afternoon, I still spend hours and hours learning as much as I can. I know that this can be done and it is starting to pay off but for me, it has been nothing but alot of hard work and time to get to this point.

Have a great weekend,
Valerie

[Kikib]

Yep I am with you Thomas – almost sold yesterday but … so we are most likely looking at a small loss.

[Kikib]

Amy,
I did the same F trade as you – so not sure where we both got it?

AMZN sure did steal the show but unfortunately, I had a great credit iron condor in place way OTM on both sides for a few weeks and now I just need the share price to come down below $665 and I will be fine – amazing! It’s starting to give up some steam in pre trading but I need time decay and sellers to come in soon! Expires today.

Thanks,
Valerie

[Kikib]

Thanks Putrookie I hope it helps. Yes it was new to me but I really thought it through and tried to keep the psychology out of it. As I said,I sold BWLD right away too but there’s nothing wrong with taking a profit.

Now that Teddi has posted some more Reverse Iron Condor Trades for today, I plan to get in on some of those since FB is going to soar. I didn’t have the nerve to do as many as Teddi did (hey Teddi is dinner on you LOL), but I am still happy!

My BIDU trade as I promised. I guess you could say I was more conservative than Teddi (tighter spreads), but still more or less in the range:

Bought $180 P @ 6.41 & Sold the $185 for $3.06
Bought $190 C @ 7.46 & Sold the 197.50 for $4.37

I stayed with 3 contracts on this one since it’s only the 2nd time I have traded this stock.

Good luck to everyone trading today. Last earnings season I tried a strategy that cost me alot. Just a painful learning experience. I decided I wouldn’t make earnings trades again but you can’t walk away from the increased volatility (I review the stock’s IV percentile as well) – too much good can happen if you do it right!

Valerie

PS – I am on TOS. Many platforms I believe have the IV percentile but if someone doesn’t have it, it is the stock’s own IV relative to where the IV has been for a year I believe. The higher the number, the higher the IV. Right before earnings most stocks IV is really high – at least those are the ones I have been told to trade!

[Kikib]

Hi,
I posted earlier the success I had but also have/had some of the same questions. Until Teddi has a chance to respond, I can tell you (hopefully it will help), what I researched.

1. If you are using it as an earnings trade as we are, then it is very important that the stock has alot of volatility.
2. I reviewed the price movements of a few stocks (including some that Teddi chose) on earnings announcement day. I went back 3 years and came up with an average price movement.
3. I chose my prices based close to where it is trading now – as did Teddi.
4. Yes you really are managing 2 separate trades. I was so pleased with the profit I rec’d on one I closed it out both sides immediately. However, depending upon the stock, the ideal situation is to the the options expire worthless. This is a very short term trade.

So I hope to hear from Teddi soon to make sure my strategy is intact. I just place a trade on BIDU using the above guidelines – will post the actual trade after the close – I want to try for one more trade today.

Valerie

[Kikib]

Thanks Teddi
You just reconfirmed a tweet I sent you!

[Kikib]

Well I took a stab at UDOW once the 2050 level broke in late afternoon. I was stopped out quickly since I had tight stop losses. My success with Market Direction trades started out great, then I got greedy, and now I am paying the price while learning a very valuable lesson.

In the end, I will be OK – but I know what not to do! So the quick small loss was OK with me but now since I am sitting on SDOW and SQQQ, I am hoping for the downside to continue. Then if I trade these inverse ETFs, it will be SHORT TERM only with tight stop losses in place.

[Kikib]

Thx – could that be a part of the reason the stock went down quite a bit yesterday?

[Kikib]

Thank you Denis appreciate your feedback. We bought MDBX when it was on the regular exchange but the rest is really due to bad advice! Why (this was not Schwab but another brokerage), didn’t she tell us to sell when it soared to $90 on a speculative stock or have stop losses on all of our positions? I can’t answer that and we weren’t paying enough attention. This was someone that we had worked with several years ago by the way and she really did great with our portfolio – I guess she just lost interest in her career – I really don’t know. Funny when we said we were leaving the fees were going to be reduced by over 50%… So angry you bet but I can say with confidence this is the right decision. I cannot trust another financial advisor again.

Yes – I loved finding that little “secret” of moving from the traditional to the Roth – had a couple of more we did that with and doubt that any of them can get any lower or will just go bankrupt- which of course we have accepted could easily be what happens.. But if not, what a great strategy if something good comes out of it and now that I am in charge, the stocks will be sold without getting greedy – may not even wait to get back to our CB but now, might as well let them sit there.

Thx for the SPXS tip and I will do my research. I really did get the SDOW but just a bad time when I posted. However, I have been doing paper trades a lot lately and will continue or take a small amount of capital to trade. For me it is becoming all about the Trade Plan that I am tweaking as I learn more. I keep daily notes, a detailed spreadsheet on all my positions so I can just plug in the numbers to see how it’s going to work for where we are – what will be the ARR and the total return? If you have any more tips, I am very appreciative of any suggestions.

Finally – credit spreads – I have to have that capability! So I am looking around and I like Options Express, but they would have to come way down on their fees – and maybe with a portfolio of our size (at least we have something left!), they will. While Schwab bought them out, they are still 2 different companies and they will let you do credit spreads.

Again thx – to everyone for the support as I continue to learn. The day I say I have it all figured out had better never come if you understand my point.

[Kikib]

Thx Amy and you described it better than me. Instead of buying Puts as insurance on core holdings, that’s how I see this I think :)

Having said that, I still have a long way to go to get rid of the losers but it’s getting better.

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