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Tom,
I too stopped this trade in the fall of last year because of low premiums. Not too sure I want to start back up in this volatile mkt. Your orders show the STO for APR, which I take as the April monthly options. These don’t match up to the BTO (APR 30) orders, creating calendar spreads. Is that the intention. Just curious. Mark
Teddi,
Here is the specifc $UNH trade that mimics almost all of my other credit put spread current issues:
1). Jan 22 Sold 5 contracts of the Feb9 $230/$210 Puts Spread ($10K Spread requirement), – Net $306.85. Idea was taken from the Watch List
2). Today when $UNH breached $224 I started looking for credit put spreads that would fit a $10K spread requirement. Because the long put premiums are so high, it would have taken a much greater than $10K spread. Creating a larger spread eats away from available capital.
3a). Sold 4 contracts of the Jan2019 $200 Puts $12.85 credit – net $5,134.86. Naked Put Margin $16.5K
3B). Closed the Feb9 $230/210 Put Spread – cost $3711.06
3C). The trade ended positive in terms of cash, but I wasn’t able to protect the $200 put with a long put without eating up more than $16.5KRolling out/down credit put spreads appears to be more difficult in volatile markets such as the current one. Any help you can provide is appreciated. Thx Mark
Hi Teddi,
Yogarose52 has posted on the UNH thread your request regarding the position. Your explanation will hopefully go a long way as I’m also curious as how to solve this issue with the put spread. How did you roll down/out the trade? Thanks, Mark
Amy,
I’m not gender biased at all and would like the opportunity to discuss trades, markets,etc. My name is obvious, look me up on Facebook. I’m in Green Valley, AZ. Mark
Tom,
With all do respect, there are posts in this forum asking for Teddi’s help in rolling “large cap, dividend paying, well established companies”. $UNH is one example. I’ve had to recently roll $CAT, $GS, $UNH, & $MCD. These are large cap, well established dividend paying companies. What we aren’t seeing from Teddi are the roll out/down trades that she is performing on her portfolio. OK, maybe a couple such as $AXP, and ?
In these times, which doesn’t seem to happen that often (10% correction once a year from what I’ve read) it would be nice to get real live “outcome” information. Similar to what is published on the Watch List articles.
I get what you want and would like to see her continue, but also pay more time to the “hurt” side of the trades.
Repectfully – Mark
Agree Bill & Amy. Seems that in order to do the number of SPY Puts/Call trades, one must be a day trader. I’m at the computer most of the day, but not every minute. Mark
Patience paid off on this one Amy :) $$$$$
I hope that all have seen that it only takes one Tomorrow’s Trade to pay for a year’s subscription. And, while it’s good to thank Teddi here in the forum, I’ve banged on the table before to also consider adding to the tip jar. If 100 of us take 1 Tomorrow’s Trade net of $300 and stuff it in the jar, we amass $30K. Just like her stock challenges, lets see how big we can make that tip jar!
Excellent find.
Note: “Important! If the short option is held beyond the long option expiration the new short only position will be considered uncovered and will have substantial downside risk.”
This is why Teddi will re-assess in June when the long option expires and decide whether or not to buy another long out for the next 6 months and/or close out the short option.
Mark
Dzoanh,
Pretty sure Teddi can offer a much more in depth technical answer, but I had the same quizzical look after reading the article. Here is what I found out after some research…
The use of a protective put is for insurance, in case of a catastrophe. If $BAC or $GE crashes, then the protective put is in place to make $$$ from that crash. The shorter duration is a factor of cost. Also, if a put spread was created, it might cost more in margin maintenance than the naked put, depending on the spread size. Hope this helps.
Mark
Article mentioned $1.22 premium for the Feb 16 $155P. Probably should have read $2.22. Mark
Hi Teddi,
I’m one of those people that is tactile and likes to print your articles. Writing notes on the paper helps to remember the trades and the thinking at that time. While I really like the new design and data of the Watch list and Howling Dogs articles, these now appear to be formatted tables, and are difficult to copy and paste into Word docs to format/print. I’m hoping you and the technical team will be looking into reestablishing the WordPress print option. I offered to volunteer to research this in a tweet late last December – but didn’t get a response. Mark
I was thinking that exact situation when writing the response, lol.
Mark
Teddi,
Thanks for the detailed response that includes examples. For transparency, I have 4 of the leaps. I’ll more than likely roll them out after a back of the envelope calculation of my tax situation. It might behoove me to take the loss.
Mark
Hi Teddi,
Today’s TGT leap suggestion reminded me of the $GE $25 Jan 19. 2018 leap that was suggested in late January of this year. I still have the $GE position, but as you know, it’s way under water. I could buy it back and take the tax loss to offset gains, or let it get assigned for stock in January, or roll it out again. Was wondering what your thoughts were between assignment or roll out.
Thanks – Mark
Teddi,
Please send some of the snow producing weather down to the lower 48. My NatGas Futures Options could use the boost! Mark
Bavage,
NVDA is a technology/semiconductor stock. BABA is Chinese e-commerce, retail and technology conglomerate, much like AMZN here in the U.S. Teddi already has a Million $$$ Challenge for $AMZN.
Because of the duplicity, my choice is NVDA.
Teddi,
Speaking of timing…
Pondering a synthetic trade for $MCD. Sell the Jan 19 $170P and Buy the Jan 19 $170 for a debit of $4.00. The sale of the Put is to offset the debit cost of the call. The $4.00 is not much premium over the current price $173.50 of the stock. Looking forward to your opinion.
Thanks – Mark
flyboy,
Can you give a few trade examples.
Thanks – Mark
Hi Teddi,
It looks like we can only renew for one year. Do we engage the renewal page again for multiple years?
Mark
And so does earningswhispers.com. After hours on the 14th.
Hi Teddi,
Amgen has piqued my interest. After searching your site, I noticed only recent articles about Amgen – Trade Ahead of Earnings and Covered Calls Super Charge Buy-Write Strategies – no unique put selling.
My question is how do you determine the type of strategy to use for a particular equity? When would you only sell puts, or as in Amgen’s case, why the two strategies and not put selling?
Thanks – Mark
P.S. As per now, I’ve been trading $XBI options and not individual bio-tech options.Teddi,
Not sure it’s an “access” issue or “availability” issue. The article references Manu, a Canadian stock. Maybe Sid is looking for a US flavor of using Leap Options?
Being that I’m from Southern AZ (US), I’d be interested as well!
Thanks,
MarkTotally see your point Teddi on capital spent.
However, some use an IRA to do longer dated trades. And even though I could do a cash secured put, it would eat up even more potential capital. I’m OK with spending the little amount of capital to make the spread and use less margin maint than a naked put would for the “walk” trades. My IRA allows for spread trades, thank goodness. Mark
Teddi,
Any chance of updating the tutorial with rating range recommendations. For example, the conservative narrative states, “To make a decision for a conservative trade, we want to see very high ratings”. It would be nice if this was re-stated in terms of a number range. Example, “To make a decision for a conservative trade, we want to see ratings between 65% -95%”.
Also, could this theme be incorporated into the Aggressive and Speculative narratives?
Thanks – Mark