[Teddi Knight]

I was selling AXP puts but got caught in the downdraft. Now, I have some AXP from higher levels, and I’m selling CCs. I think it’s a decent stock, paying a so-so’ 1.2% dividend, but I doubt it’s going out of business any time soon.

Eventually, the market will come back and people will like credit cards again. For the time being, volatility is high and that produces nice premiums.

[Teddi Knight]

Are they still a long way out? If so, you can always hold on and see if the underlying will improve before exp get closer.

If exp is getting close, you have the same old choices: sell and take the loss ; let ’em get assigned ; or roll.

[Teddi Knight]

STO FEB 20 $70 for .61

[Teddi Knight]

Sold feb 20 $77.5 for 50 cents

[Teddi Knight]

STO FB Feb13 70.5 P @ .50
Thanks 1579 … I think this is a good short term trade.

[Teddi Knight]

Today I concluded the final trade from the 2014 Exxon Mobil Stock trades. This trade had started November 28 2014. The end of the last trade for 2014 in Exxon Mobil Stock shows what an investor can accomplish if they put aside their emotions, turn down the rhetoric from analysts and simply concentrate on the chart patterns the stock is exhibiting.

Investors can learn a lot from other investor’s trades. I spend a lot of time reviewing other investor trades and when possible, asking questions to determine why they “thought” a certain way or did a specific move.

This trade analysis is lengthy at 2300 words and will require 8 pages if printed, but I believe I have learned more from studying past trades and learning from their outcome than from any other method available.

https://www.fullyinformed.com/exxon-mobil-stock-xom-trade-analysis-handling-a-losing-trade/

[Teddi Knight]

Nothing concerns me on Facebook STock. Even if it should move lower it will be easy to repair those trades as long as the volume of puts sold is not too high and you have some capital available to rescue your trade. This would be an easy rescue.

[Teddi Knight]

Have been selling puts at 74.50 since the beginning of the year.

As have I. But of course in this market, it could go a lot lower. Great earnings though, so it will find a floor soon IMO.

[Teddi Knight]

I believe SPXU and SDOW are both 3X leveraged short ETF’s, but SPXU works inverse to the $SPX (S&P500) whereas SDOW works inverse to the $DJI (DOW).

[Teddi Knight]

A quick look at the chart shows strong support at 74-74.50 and it is now sitting at 75.
Have been selling puts at 74.50 since the beginning of the year.

Southern Yankee

[Teddi Knight]

is SPXU is similar to SDOW?

[Teddi Knight]

If you can get .50 your cost basis would be $70 if assigned, which is below the low over the last 6 months (see chart). Seems like a good trade to me (at least one I would consider). Are you willing to be assigned FB at $70.50 or are you planning to roll down if it moves to/below your strike?

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[Teddi Knight]

NO, I RECEIVED $8.00 for each set of 10 puts. That’s why I went so far out, but now I wish I had gone lower and closer.

[Teddi Knight]

FWIW: I’ve noted a Bull Flag breakout on Gild. Flagpole is worth $100 so follow through would be nice.

Chart attached.

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[Teddi Knight]

If you sell only small quantities of naked puts and keep cash back, it would be easy to rescue naked puts at the present level with just a small amount of capital needed.

[Teddi Knight]

GILD is an intriguing trade. Congratulations on so many successful trades. This is what Put Selling often can amount to. Finding perfect stocks which can be traded for some time with limited risk of assignment or loss.

[Teddi Knight]

If the market comes unglued Amazon could fall back, otherwise buying calls could be a trade worth considering. I would think buying in the money calls would be the better way to try to profit from the upturn if it does break out.

[Teddi Knight]

Your trade was nicely detailed out and explained. It was excellent to review. I have one question and it is not a criticism. I used to try these types of trades decades ago before I starting being mentored. The problem here is what was the actual capital that could have been earned on the trade against the capital in use whether margin or actual cash. If the trade had worked out properly on both sides of the trade, you would have earned $2.00 (I think you indicated) for a 1 day trade and risked for 1 day capital of $61,000. That means the gain was 0.32% for the day for $200 earned. Is this not more gambling than actually investing? You could have for example, just done a spy call or put trade with far less capital and earned more with less risk and more time to manage the trade. Another trade could have been in IWM ETF or the Ultra short products.
Again, this is not a criticism and I very much enjoyed your write-up, but I am wondering about the goal and plan and whether the risk justified the gain.
I found over a period of time that I could not earn a steady income through this type of trading. The man who mentored me showed me all kinds of methods but often I would end up with a string of winning trades and then one loss would wipe them out.
Just wondering about the reasoning behind entering the trade? Is this something you do regularly?
Again, not a criticism. Everyone has their methods.

[Teddi Knight]

Yeah at least till next earnings this has the potential to reach $390 in my opinion. Sentiment is definitely bullish and price action is coming up after forming a bottom over some period of time. Any improvements in general market conditions should see good price action from AMZN.

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[Teddi Knight]

I have been selling puts on GILD since mid-2013. It has been by far my most lucrative stock for put selling. I sell 10-20 puts at a time, usually a week or a month out. Although there have been occasional unwelcome dips, the stock has been in a long-term uptrend for years and has been easy to sell puts against.

The last few months have been a bit more volatile with ABBV’s HepC drug coming to market. The next earnings report (Tuesday 2/3) could be interesting. GILD should beat by a considerable margin, but short-term holders might sell on the news especially if guidance is conservative.

[Teddi Knight]

AMZN looks to have made a Bull Flag breakout. If so, worth up to $300!

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[Teddi Knight]

@rishi2005 – thanks a lot for your comments! I’ll be honest and say unlike the large caps I usually trade, I went into this one without a proper plan regarding whether or not I would own the stock. It was more an opportunistic play on oil (which clearly has not played out well).

I do like your first strategy of selling the stock and replacing it with another ITM put – freeing up capital. I just might do that for 1 contract and see how that plans out. (My commissions are $1 per contract so small lots are okay).

I may also try your second strategy in an attempt to lower cost basis – will take your advice and look at the charts and sell another put based on the test/retest of current levels.

Once again, extremely grateful for your time and generosity in helping with this very detailed reply!

Best,
Daryl

[Teddi Knight]

You have a well defined plan. The strategy of 10-20-30 and MACD will work well. Foresetta, see the links to the right of the article in the index. You can see all the related articles in there that cover off the two strategies rishi2005 is mentioning for his Covered Calls.

[Teddi Knight]

Great chart. Thanks so much for posting this. I am completing my look at this ETF this evening.

[Teddi Knight]

Your plan is very clear. However, how do you use MACD to determine when to sell covered calls (if you should need to do so)?

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