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The selling is Skechers is over for now. Time to close the long puts if you have not already. You might want to see if the short puts can bounce a bit before closing them but once the long puts are sold, there is no further protection for the short puts at $28.
TeddiThis morning I added to my naked put position with 300 shares using the Bollinger Bands Strategy Trade. Let’s see how the stock performs. There are just 3 weeks to earnings which are expected to be poor. https://www.fullyinformed.com/deere-and-company-stock-de-trade-alert-for-july-26-2016/
I fixed the trade for you and tried better to explain how the strategy works by re-writing part of the article under the heading “After Hours Update” which you can review here: https://www.fullyinformed.com/members/covered-calls-super-charge-buy-write-strategy-trade-for-july-12-2016/
I was exercised out of my shares today. The premium earned on the trade was 81 cents as you calculated out. None of the figures in the article include commissions.
Here is the final tally with commissions: Commissions: $12.00 to be exercised out of the shares, $5.00 for the stock purchase and $3.00 for selling the 4 covered calls.
Income earned on the trade was 81 cents X 4 = $324.00 less $20 = $304.00. Capital in use was $64.94 X 400 = $25,976.00. Actual return on the trade was 1.17%. A decent return for a few hours of work. Hope this helps you out.
Without taking the time to review all your questions, the whole idea of the trade is to show how this type of trade can be setup and how an investor can profit from it while also protecting his capital from potential losses. The article is simply to show that the trade could be profitable with or without the dividend. Sorry if the numbers may be off. Most investors who know this strategy can calculate their own returns. I ran it through quickly so I could be wrong. But that is not the value of the article. It is to show investors that this is a terrific trade with protection and profit built in. I’ll take a look at the numbers but don’t get hung up on them. Instead look at what the trade accomplishes. That the purpose of posting the trade.
Yes, I think earning 80% over just a few days is a great trade and cause for closing. With the market moving higher, you can always find another trade to apply the capital to that is more worthwhile than waiting for the last 20% in this trade. IMO.
TeddiNot sure when it will get done. I am busy on the software and researching other trades, writing articles and assisting members. I will keep at it. Thanks for the reminder. All the trades for 2016 though can be seen by going through all the articles for the year. Stay with the “latest” articles and scroll through. https://www.fullyinformed.com/members/category/latest-articles/ It has been an excellent year.
You seem to be having trouble with this strategy. You are possibly not reading the settings section in the article. I have put up some pictures for you and I have put up a new heading. Look for Finding Entry Points and then look at Strategy Settings. https://www.fullyinformed.com/members/the-weekly-wanderer-strategy-trading-weekly-options/
Hope this gets you underway. Remember to always paper trade a strategy until your results are consistently winners. To risk actual capital trying to learn a strategy. Take care.
Per the outline of the strategy:
SMA and EMA AveragesThe 7 day simple moving average (SMA) and the 21 day exponential moving average (EMA) are guidelines to help advise when the stock may be about to turn up or down.
Fast Stochastic
The Fast Stochastic indicator set for a K period of 14 and a D period of 3 is the second guide to assist in advising when the stock is oversold or overbought which again assists with entry and exit points.
Definitely the $58 valuation. The August 19 expiry $57.50 is 60 cents. I think that’s a great trade. In fact I will sell 4 of it.
Nice trade Denis.
I would roll it and stay at the same strikes. Wells Fargo has a lot of support at $46 so a plunge to $44 I would expect to be followed by a move back to $46 within a few days to weeks.
Hi Amy. Carol’s $105.50 put strike is a bit higher than I like. Premiums were high on June 27. I sold 10 of the $105 put strike for $1.02 at 3:13 PM. $105 has a lot of support. For 50 cents difference in the put strikes I saw no reason to take on the extra risk. $105 is easy to defend. The $105.50 is close enough that it too could be defended by rolling down whereas I remain confident the $105 put strike won’t even be reached by July 8. I don’t think there was any need to close your position though for the 50 cents difference. Both trades could be defended. I just prefer $105 which I doubt the index would fall to by the expiry date which may not be the case with the $105.50. As my put premiums earned were almost the same, I saw no reason to take on more risk. Hope this makes sense for you. It is all about the least amount of risk.
Teddi
TeddiI sold the July 22 $78.50 for 60 cents on Thursday July 7. https://www.fullyinformed.com/members/tomorrows-trade-ideas-for-july-8-2016/
Yes, I still like this trade. Wells Fargo Stock is Tomorrow’s Trade for Friday July 8 as well. https://www.fullyinformed.com/members/tomorrows-trade-ideas-for-july-8-2016/
Teddi
You are most welcome.
TeddiAll the settings for the Weekly Wanderer Strategy are detailed here: https://www.fullyinformed.com/members/the-weekly-wanderer-strategy-trading-weekly-options/
The index on the right hand side lists the strategies including the Weekly Wanderer Strategy . From the article here are the settings again:
Moving Average Envelope
The moving average envelope if the key to advising what put strike I should consider selling. The key is to never sell a put strike that is INSIDE the moving average. It must always be outside the moving average bands. By setting it for 14 and 5 it gives the envelope enough price fluctuation room to follow the stock as it wanders and enough time period to advise what strikes will most likely not be in the money over a one to 2 week time period.
SMA and EMA Averages
The 7 day simple moving average (SMA) and the 21 day exponential moving average (EMA) are guidelines to help advise when the stock may be about to turn up or down.
Fast Stochastic
The Fast Stochastic indicator set for a K period of 14 and a D period of 3 is the second guide to assist in advising when the stock is oversold or overbought which again assists with entry and exit points.
I don’t think Brexit will impact Walgreens Boots Alliance Stock any more than any other stock, at the present time.
TeddiNice trade on this one Amy!
I moved in as well but on the naked put side. I sold the $73 put strike for Aug 5 expiry for $1.00 https://www.fullyinformed.com/members/more-morning-trade-alerts-and-ideas-june-30-2016/
This is a risk-on trade which is part of the reason for the high premiums. Still an interesting trade but not a put strike I like.
Probably a mute point now the Amy. LOL. Yes I expected a move to 2000. A 5% correction definitely appeared to be warranted based on global market pullbacks. Now we need to see if 5% if bout it for the time being.
I rewrote the paragraph for you Tom so it makes more sense. https://www.fullyinformed.com/members/walk-that-profit-home-to-momma-strategy-to-profit-from-the-brexit-meltdown/
As to the long put OTM it depends on your margin needs. If you need a lot of margin then it makes sense to place OTM long puts at the same time. I have a lot of available margin so I prefer my method.
Thanks Toby. I will do my best. It should have been last week when it was rolled out but the site won’t accommodate it so we are looking into revamping parts of the site.