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Amy I rolled my naked puts to Nov expiry and down to $145. If the stock moves higher, that will be fine. I can close them at some point, but I believe it is always better to act when the original plan was to always roll when the put strike is reached. I also set up a reverse iron condor.
Well Costco is not quite the same as BMY but no point is spending energy repairing a trade if you can fix it now. You could consider rolling lower today and you could also put together a trade ahead of earnings today or buy some puts at lower strikes to protect your present position at $150 from too much more loss.
It depends on your outlook. For me if the stock rallies back I will pick up some shares to turn naked calls into covered calls. I then normally buy these back and then roll them lower so I have essentially covered calls that I want exercised out. I see nothing wrong with your positions. As well, if you look at all your positions and if for example they were ALL assigned, figure out your cost basis and whether you would be happy owning shares at those prices. If not, then you know that you will definitely roll lower at the first sign of trouble. As well, if there is a bounce back to $60 for example, you would take that opportunity to buy back the $60 and roll it lower, further away from possible assignment rather than wait for the put to possibly expire.
If you know your goal, which you seem to by looking at your positions, then you know when to act rather than sit back and “hope” it works out. Any rally, you want to close positions that are in the money and move lower. Any drop and you want to move further out in time to delay assignment as long as possible. When it looks like selling covered calls is the better bet, then you might consider assignment of shares, but for me, I prefer to sell naked calls and then IF I have to, buy shares to turn them into covered calls, rather than accept stock now. I hope this is easy enough to follow as it is hard without examples to explain in detail. I plan to keep posting my BMY Stock trades as I hope it will make it easier for investors to follow this type of repair.Another trade alert in BMY Stock today as I continue with my repair of my trades caught in the money. https://www.fullyinformed.com/bristol-myers-squibb-stock-bmy-trade-alert-as-repair-continues-sep-27-2016/
TeddiHere is the latest on the Spy Call trade from Oct 23. I am prepared to let the trade expire on Oct 7. Here is how I repaired the trade to cover the potential loss. https://www.fullyinformed.com/morning-trade-alerts-and-ideas-sep-27-2016/
Short-term puts lose value quickly depending on the market movement. The two weeks often gives me extra time to have the trade turn out in my favor or at least allows more time for me to repair the trade. One week, when the market is moving against my trade is rarely enough time to rescue it without taken larger than I would like losses. So two weeks I find is in most instances the best.
Support is at $46. I would accept assignment of shares over taking a paper loss on the trade if there was not enough capital to roll-down the nnaked puts. This trade was for Sept 30. I am continuing to hold mine. The chart for the trade on Sep 8 shows the support at $46. https://www.fullyinformed.com/members/wells-fargo-stock-wfc-trade-alert-for-sep-8-2016/
On their income I have no idea. I just know that this is a great company and I am sure the Senate will make lots of noise over the scandal but in the end it too will pass. I have a lot of naked puts below $46 on the stock from the last week of pullback.
The website is completely different. Right now the new categories are being added and changes made to the layout. There won’t be any need for more FAQ than there is already.
I do not use TOS. I use TD Waterhouse for charts along with IB. They are moving envelopes. But they have no real bearing for the article unless you are trading spy ETF. If you are then you want to use the Spy Settings which you can study here: https://www.fullyinformed.com/members/spy-puts-trade-profiting-from-volatility-trading/
Hi Scott;
The 5 day intraday chart is using a 50 period moving envelope but sometimes I use the Bollinger Bands set for 14 period and 2 standard deviation. There is no fast rule. I use different settings to view the market in different manners depending on the action for the day. Some days I do not use any Bollinger Bands or Envelope setting at all.Yes changes are being put in place starting yesterday. You will be seeing them appear probably by tomorrow or tonight. Meanwhile the software is being implemented next week to see how well it can function. Lots of exciting things developing for sure.
Excellent trade eminitrader. It is important to keep taking profits. This is not a bear market just a pullback so taking profits is essential for the spy put trade to provide profits, other wise bounce backs will wipe out any gains.
TeddiHi Amy; This is a duplicate of the post I placed on your Costco post but this will make sure you see it.
On Costco I did exactly what was outlined in my original article. I have continued to roll lower, added more positions in each roll-down and am sitting at $150 put strike. I then turned them into credit put spreads to keep the capital needed to a minimum. To help reduce the cost to rolldown I sold the Oct 7 expiry $160 call strike for $1.12 on Sept 8. I will pick up shares if the stock should recover to $161 before Oct 7 to turn these into covered calls.I bought the $170 call strike for 7 cents for Oct 7 expiry to turn my naked calls into credit call spreads. Since I am short at $150, obviously I hope the stock will rally which is why I don’t mind holding the short calls at $160.
TeddiOn Costco I did exactly what was outlined in my original article. I have continued to roll lower, added more positions in each roll-down and am sitting at $150. I then turned them into credit put spreads to keep the capital needed to a minimum. To help reduce the cost to rolldown I sold the Oct 7 expiry $160 call strike for $1.12 on Sept 8. I will pick up shares if the stock should recover to $161 before Oct 7 to turn these into covered calls.I bought the $170 call strike for 7 cents for Oct 7 expiry to turn my naked calls into credit call spreads.
Hi Amy;
No, this is not a rescue or repair but a new short-term trade I was outlining on the weekend.
If you want a fast repair your $67.50 put strike for Sep 16 could be bought back today for $1.43 near the close. You earned 68 cents on the original sell, so your loss is 75 cents per contract. I don’t know how many contracts you sold but you can easily pick up 75 cents on the $62.50 put strike for Oct 21 expiry or you can increase the puts sold and move lower to the $60 which I discussed this weekend in the same article you referenced. It was at 37 cents at the close. To quickly make up the loss you can double your short put contracts. As well I know you love naked calls so you can also split the loss between naked calls and naked puts if you are so inclined.
However the article you referenced is discussing how to approach stocks that fall back to continue selling puts. It was not a repair or rescue and was not meant as such.
For myself I am content to keep rolling my position in General Mills. Don’t worry, when I cover a rescue I refer to it specifically as a rescue such as I did with BMY Stock on the weekend. Take care.
TeddiHere is another rescue and repair article for BMY Stock https://www.fullyinformed.com/bristol-myers-squibb-stock-bmy-using-leap-options-to-rescue-deep-in-the-money-naked-puts/
I would consider taking profits in naked calls.
Stocks at new 52 week highs from last week are going to be sold. Investors always will take the best profits first and that is always the 52 week highs. You can roll to the $65 and add a couple of naked puts if you want but I am waiting until next week.
Yes I would definitely take some profits
I did credit put spreads. At present I am not concerned about the Irish issue.
I am surprised you were not exercised out. What call strike did you sell? There is a lot of support down at $90.