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Almost done. This is a great company and I am not concerned about the pullback. It remains opportunities to set up additional trades. The little rally now shows the stock is trying to hold the $55 level. Overall the bottom is lower, at $50 but whether the stock gets that low is questionable. Remember that it was perception that dropped the stock and not actual drops in revenue. There was no revenue from the drug trial just the perception that the company would be making more revenue if the product had worked. Stock trading is all about emotions.
Already moved. I will post the trades later today.
Nice trade for the next 8 days.
TeddiYes, which with IWM is for shares since it is an ETF. With shares I have more opportunity to repair a trade while possibly not taking a loss. Once cash assigned the trade is over and a new one has to start to recover losses.
If it is a short-term trade then 50% right off the start is a great return if it is just a couple of days. From there I would adjust 10% daily. I always keep open until the last few days to expiry, an offer to buy to close for 5 cents since interactive broker does not charge commissions for closing trades for 5 cents or less.
I don’t think this is an overly expensive stock. Here is an analysis from Morningstar: EPS growth at CPB is below the industry average, and worse, is declining. The most recent EPS was $2.29, a decrease of -8.55% over the previous year.
I suggested the trade again as I felt earnings might disappoint which is why I sold the $57.50 put strike for Sept 16 again on Monday and again today. Overall any move to below $60 I think will be bought. Certainly at $57.50 investors will be buying the stock as it should bounce back.
Thanks very much for posting this. It is not a stock I trade in primarily as I prefer a dividend stock when trading in the healthcare sector. However this is a very practical company that has a strong balance sheet and is not overly expensive. Thanks again.
TeddiI usually look at the strikes available and in particular the volume available in options. IWM is extremely liquid as is RUT. I think a lot comes down to personal experience and preference. I have traded the IWM for so long it has built up a strong comfort level and knowledge of where the index has support, weakness, buying opportunities, where to sell, that sort of thing. There are those investors who have traded the RUT for so long they are in the same boat I am sure. But the IWM is well prices and volumes are liquid. The RUT is great but the prices high making it a bit more difficult for my credit put spreads if assigned. I think that has to be perhaps the biggest disadvantage with the RUT that I can think of.
TeddiHi Danny;
The strategy is to earn a return for a period of one or two days that is tied around the dividend being declared. While I do not earn the dividend I can earn a partial premium which is smaller than the dividend but also is for only a one or two-day period which keeps my capital safe but allows it to earn quick gains. This article explains the strategy https://www.fullyinformed.com/members/boosting-returns-with-the-super-charge-buy-write-strategy/
TeddiExcellent choice Denis. You will be pleased I hope with IB.
There is no consistent list. I review each stock on volatility and chart patterns to decide whether to set up reverse iron condors.
I use TOL Stock for Put Selling and the ETF XHB. Strategies are always the same – put selling.
Doing my best Toby as we work toward launching.
Don’t forget you can also short calls further out which is not a bad strategy as well to help defray losses. Calculate out the loss on the call, then sell as high a call as possible further out, perhaps November or December to cover the loss. There are other strategies to consider as well including calculating remaining premiums for call positions and then buying less of calls further out to keep the capital being used in check. This needs to be written up in a fuller outline to be understood.
I will write this up in an article to better explain it. Through much of July I was shorting calls in August to defray losses. As losses get covered I close Aug calls and move to September. A fuller outline in needed but with the market staying higher, the VIX calls will lose value so selling VIX calls has continued to keep losses manageable.
This is an ongoing trade. I just have not had time to update the trade tables. Follow this link to read 2016. https://www.fullyinformed.com/members/category/apple-stock/
Teddi
Sorry, I missed this post Larry. I would have been rolling the long calls earlier and continued to sell more of the $20 or even $18 calls as the market moves to new highs. I am now into mid- September with my VIX Index Calls.
Here is some further information on BMY and trades done today https://www.fullyinformed.com/bristol-myers-squibb-stock-bmy-plunge-for-a-second-day-trade-alert-and-updates-aug-8-2016/
If you need more help, outline your position exactly and I can take a look.
My rescue was outlined on Friday https://www.fullyinformed.com/members/bristol-myers-squibb-stock-bmy-trading-the-plunge-trade-alert-and-updates-aug-5-2016/
Today’s pullback is on the back of downgrades by a number of companies including GS and CS. I would expect yet another bounce.
Thanks for the update on the Walgreens Boots Alliance Stock situation. I upodated my trade article https://www.fullyinformed.com/afternoon-trade-alerts-and-ideas-for-july-27-2016/ and sold the $77.50 put strike for 74 cents. GRRRRR…. to Amy. LOL.
Here are today’s strategy lay outs of the modified reverse iron condors I am using for the Fed’s announcement this afternoon at 2:00 PM https://www.fullyinformed.com/spy-etf-trade-alert-getting-ahead-of-the-fed-strategy-trade-july-27-2016/
Yes I entered GILD on Monday and closed on Tuesday the put side as the total amount of my spread was made. I will update this in a short article for you. I am holding the call side as there is no value in closing the call side and the stock just might bounce back although I somehow doubt it.
There are a number of factors at play with credit put spreads. To sum it up as quickly as possible:
1) It uses a lot less capital.
2) It effectively allows you to setup and hold more trades with far less margin needs but …see number 3
3) At the same time it is also a very effective way to use margin especially for smaller trading accounts.
4) It offers some protection against downside movements but normally, large downside movements depending on how tight or small the spread is.
5) It allows an investor to trade is “higher priced” stocks which often can get better returns, such as Amazon or Google or even the Buffalo Wild Wings Trade I did today.I updated the article to cover off your concern. I am sure others will have the same concern. To my knowledge this offering was back in May and took effect on July 26. I don’t think it will impact my trade ideas by much but in the article I indicated if the stock opens considerably lower on Wednesday I will update the article and trade ideas.