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I respectfully disagree with “… never placed a dollar into the market.”.
In order to get the call premium, the stock had to be purchased. At the purchase time until the market closes cash available is reduced by the amount of the buying price of the stock. The amount of margin is also affected during the time the stock is in the account.
I’m NOT trading this one today. I use Teddi’s Super Charge strategy to validate what stocks to GET the dividend from. I then try to sell the stock back for just above the original buying price. This is quite an exercise in buying low and selling high.
Because of the $CBRL yearly dividend included in the quarterly dividend, there is NO way to buy low and sell high within my range of time. The yearly dividend will know the stock down big time. See my previous post of 2014 and present analysis of what happens at this dividend distribution.
Don’t understand this strategy of selling CBRL puts here. The premiums don’t come close to $1.00. Mark
All,
Just looked at CBRL data going back to 2014. The yearly dividend is tricky. Make sure you write the calls so they are enticing enough that the stock is assigned and you keep ONLY the premium. Otherwise, you will be STUCK with the stock for possibly a VERY long time.
Like Teddi advises, if you haven’t done this kind of trading before, please consider paper trading it so you get an idea how the price of the stock moves around. Mark
Former members of my software team work for $AVT in the Phoenix area. They have been there for a long time. Schwab Equity Ratings gives $AVT an “A”. Earnings are 4/25. It’s surely not a divvy play at $.80/Annual Dividend Rate. Thinly traded monthly options too. Hmmmmmmm. Mark
$LYFT Schwab margin requirements = 100% for option trading. Most stocks are a standard 30%.
IPO’s typically have a “lockout’ period for insiders. I wouldn’t be surprised to see the stock sink more when insiders can sell. Maybe shorting it makes sense? Mark
Awesome article and glad there will be more information that the tool can deliver.
“The developers as of Mar 17 2019, are working on an upgrade that will indicate more details about the “put selling” worthiness of a stock. ”
Thanks for the quick response, Teddi and Happy St. Patrick’s Day!
Michael &Teddi,
I too entered entered a symbol AVT (Avnet) and got the same message. I sent a note to technical support (3/7) and still no AVT in the database. Mark
Great trade Tom. I didn’t have the same patience as you did. Trade Thursday -> May31 $2375/$2350, net credit $1.35.
It’s on my radar screen. The trade must be done Wednesday, March 6th. I’ll be watching the March 8, $37 Calls. Mark
Tom,
Thanks for sharing, especially the roll details. I didn’t think about rolling, and took the losses late last year. Looking forward to your future trades. Mark
Tom,
Thanks for the details of your SPY trades. Here are the take-aways that I got…
1) A large monitor is needed, regardless of age, lol!
2) One must be dedicated to watching/studying the SPY for the entire time the market is open
3) Commissions can eat away profits, very fast
4) Teddi does a lot of SPY tradesRE: Teddi’s SPY trades, for the month of this past January I tracked her posted trades:
a) 171 trades, 160 trades were profitable, a 93.6% winning percentage
b) $38,119 incomeMy net net: SPY trading takes up a lot of one’s trading time. This requires immense dedication. Paper trading will most likely help, but as Tom points out he pray’s. This is a telling point that there is a little bit of luck involved.
My final take on this is I wish that we would get more results from Teddi’s other trades (ex: Tomorrow’s Trade) that are close to real time, like the SPY trades. But, as one can see, these SPY trades net Teddi an incredible amount of money in volatile/choppy markets, so why change a good thing?
Yesterday, Feb 7, 2019 $BBT & $STI announced their intention to merge. The quick merger details has $BBT paying $STI shareholders the equivalent of $62.85 in $BBT shares. The merger is expected to close sometime in 4Q19. My question for Teddi and anyone else lurking, is… does it make sense to sell $STI puts and calls around that $62.85 figure. The risk to the trade seems to be getting past Congressional approval and passing regulators muster.
Mark
Teddi,
Is there any particular time frame that is best when using the 20 & 50 period moving averages? 1, 3, 6 month, Year? Daily?
Thanks – Mark
Teddi,
The timing of buying the stock after a dip and selling the calls when the stock is rising seems to take skill and technical analysis metrics. I’ve read the “Boosting Returns With The Super Charge Buy-Write Strategy” article and there isn’t any mention of technical analysis metrics.
If I want to continue to be successful with this strategy, what, if any metrics do you use to help determine when the stock has finally dipped and is beginning to rise for the stock buy and after the stock has turned back up, when to sell calls?
Thanks – Mark
Hi Bill,
I’m not trying to answer for Teddi, but it seems that a very large % of her watch list are S&P stocks that issue dividends, and have at least a 60-70% rating on her Stock Ranking Tool. Mind you, she has been known to trade stocks that fall below a 50% ranking.
I’ve been tracking for a number of years and keep a watchlist going of her trades using Schwab.
At the moment there are 91 stocks in the list. And, I haven’t updated it since last fall. UGH.Mark
Eagle3s
I would be surprised that your platform doesn’t provide for debit or credit spread choices for the condor. What platform do you use?
Mark
Teddi,
Found this when searching on “Howling”. Was wondering if you are planning on using the “Howling” strategy in 2019 despite, “In a bull market this works quite well.”, we seem to currently be far from a bull mkt. Thx Mark
Teddi,
re: “Don’t forget that sometimes you prejudge the direction you think the S&P will move based on the signals leading up to the entry point and then act accordingly in anticipation of the move.”
A) One could exchange “S&P” with anything that is traded.
B) This is the best quote I’ve read about investing. Every trade has an inherent risk. The challenge for the trader is to minimize the risk with the use of as many tools as possible. JMHO.If Teddi holds to her 50% gains strategy, she was out of that $NVDA trade yesterday (less than 1 day trade). The short call option went down to $.12. And, she sold at $.62.
This is an example of how volatile options have become in this mkt. Very difficult to make $$$. JMHO
“bear markets don’t happen except in recessions.”
Teddi,
This is not a reflection on you personally, but I’ve heard/read this statement a few times this past year from others. And, my reaction is, “there’s a first time for everything.” Maybe the economy doesn’t need to be in a recession to “induce” a bear mkt?
Markets likes stability, and that’s not what has happened in the recent past. One can point fingers at the Fed, the current administration, global growth, etc etc etc. However, the facts are, the number of dips/corrections this year have been more than most have experienced in the past few years. The dips also seem deeper. Perhaps that’s why people, myself included, feel the claws of the bear instead of seeing the dust from the hooves of the bull.
Mark
Typographical error. Refresh the web page to see correction. Also, following Teddi on Twitter will help. She routinely tweets updates when errors are updated.
“Error in put strike in $V fixed. Apologies – got the price paid to close mixed with the put strike”
Mark
Only trying to help out here and jumping in… yes, she changed the strike to $110. Refreshing the web page has the update. Mark
Hi Dennis,
I’ve started these trades with a much smaller # of contracts using $SPX and $IWM. And, in doing so, I looked at the trade log much closer to glean more ideas and came across an anomaly on the SPY 9/28 trade enries. The Open profit is smaller than the End profit. It looks like the STC 225P should be .14 and the BTC 240P should be .24. In other words, the strike amount (240P) closer to the underlying SPY price should be higher. This would yield the End profit less than the Open Profit. Mark