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What part of the article did not make sense? I didn’t see this post until now but the strangle is what I entered.
Often stocks have no bids as there is no open interest. You can place a bid or call your broker to make sure their quotes are up-to-date. Usually if you place a bid the market maker will jump in and update. The open interest on SPIL options is non-existent on many of the options which is often why there is no bid shown.
Retired at 54! My goodness the pensions from CN must be good. You are one of the lucky ones. I am rethinking my exposure to CN stock now for sure. If they can afford these rich pensions for their employees. LOL.
I’m with you on this one Jim. I would love a nap three times a day actually. LOL.
The next move will be to roll out before expiry but if the stock falls further I will then be buying back these covered calls and rolling still lower. Personally I think the stock will stop falling. Once that happens, I will then roll out and possibly even up but by selling the $75 calls I have built in a cushion in case the stock keeps falling. I will have to write more about how to quickly build a cushion when a stock falls.
I’ll take alook Jack. Thanks for letting me know.
The CBOE site has earnings lists but I just use my discount broker. They list them for all exchanges. I can then filter through to only show the stocks that I want. I suggest calling your broker to see what they have available.
Hi Alan
I see nothing wrong with the trade at this point. If the stock continued lower which I suspect could happen until it gets down to around $27.00 or $27.50, you can always break up the Nov $29 puts you sold and move some into January at lower strikes and keep the rest at $29. You could basically build a Put Selling ladder out of the trades you have done and try to control the amount of capital being used. This way you can use less capital then by just keep selling more puts as the stock moves lower. I like the flexibility of owning naked puts that have time on my side so I can buy them back and roll them still further out and down. For example if Intel got down to $27 by November, you could split up your 6 November $29’s and sell 1 X $29’s for January, 2 $27’s for April 2016 and 3 X $26’s for June 2016 as by November they should be available for trading. If you wanted to add more capital you could sell the $25 for June 2016 expiry. This keeps the larger amount of capital in use at lower strikes but would cover the cost of having to buy back the November $29 puts if necessary. It also means that perhaps only some of the positions might get assigned and the other put strikes might end up expired which would allow for more chances to sell puts again which reduces the entire cost of the trade. Hope this makes sense. It needs a better explanation but the basic outline is there.This was not actually a strangle. These are naked puts and calls. When I do a strangle I buy the put and the call. Sometimes I will turn them into debit put and call spreads to reduce the cost of the spread but they are bought and not sold. By selling the put and call you have agreed to be assigned shares. When Google moved higher your naked calls were deep in the money. If you had bought naked calls your trade would have been extremely profitable. I will look at this trade this weekend and see what I can come up with.
My chart shows Google closed today at 654.77 so I am not sure where you got your closing figure from.This would take a bit of a look Brad. I would have thought your strangle would have been fine. Are these debit spreads (calls and puts)? I had a strangle on Google which was fine but it was a true strangle. I bought calls and I bought puts. The puts will be worthless but the calls are up big. I am not sure on your trade what you actually did.
Amy I am expecting a bounce next week. The stock is extremely oversold. I would roll at that time if this was my trade. I already rolled my positions earlier and did more today. You can review all my trades through the two most recent Caterpillar Stock articles I have written. https://www.fullyinformed.com/trade-alert-rolling-down-caterpillar-stock-positions-cat-july-24-2015/ and https://www.fullyinformed.com/under-strong-selling-pressure-caterpillar-stock-cat-trades-for-2015-update-july-24-2015/
One aspect of the Intel stock trade is deciding on comfort level. I am very comfortable in the stock but if it gets down to $25, would you still be comfortable. I see nothing wrong with rolling that far out in time and down to the $28 put strike. If the goal is to eventually end up with shares then you want to be as low as possible at the time of assignment of shares. $28 is a good valuation in my opinion and using 6 month out options provides lots of flexibility for adjustments and changes in the future. I often use longer-term options when a stock declines. I enjoy earning the higher put premiums and being placed lower in the stock. I have been able to roll puts in declining stocks for years at times. Intel stock has had this type of decline before and I have rolled my way through it without difficulty. I am expecting to do the same in this downturn. So short answer – I like the Jan $28 but there is nothing wrong with the $30 strike as well and then see in September where the stock is and consider another roll out and down if Intel is still lower.
Here is the article I wrote on rescuing Intel Stock naked puts that are now in the money. https://www.fullyinformed.com/intel-stock-decline-leaves-investor-with-underwater-positions-4-rescue-strategies-to-consider/
I am working on a larger article for Larry who emailed me yesterday. I will have it up later today for some rescue and repair ideas. Hope that this will help you and others out.
I think the $160 might hold but I like the $157.50 better. This is not a stock I would want to hold. I think there are better trades elsewhere on stocks I would own if I had no choice. With IBM I have no interest in holding it at all which is why I think the $157.50 is a better choice to protect the capital in use.
Good choice on the roll-down of the covered call. At $84 you are too high. Time to move lower. I like your put strike however at the $78.50 level.
AMD’s drop will affect Intel. It always does and until AMD disappears, always will. I have never found Intel to have the kinds of revenue trouble though that AMD has. AMD should seek to be bought out by a superior company in my opinion. If you like the stock then selling the $29.50 makes sense as you could probably roll that one for months. If you do not want the stock you cannot sell in the money and should wait for the stock to try to put in place a bottom.
I must need my glasses checked. Your post does not make sense to me. You sold the $165?
I will try this weekend and see what I can do
I will post a write-up on handling this and update my trades for you. If you are nervous you have to use a stop-loss.
I don’t think it was in the store. I will have to take a look. I have it done somewhere. I’ll let you know..
If the stock should break lower and fall to $64.50, I will be rolling down to the $62.50 valuation and adding more puts.
I did 4 at 75 cents. Here is the write-up https://www.fullyinformed.com/another-drop-and-another-trade-in-packaging-corp-of-america-stock-pkg-jun-22-2015/