Just a quick noon hour market update for Wednesday September 26 2012 to discuss some stock and option ideas I am eyeing.
SPY PUT Trade
I did one SPY PUT trade yesterday.
I did one spy put trade this morning. Now with the noon hour rally I have bought more Spy Put options again as per my article from yesterday’s market close. I used the Ultimate Oscillator to time the overbought condition. Nice recovery this morning in the DOW but the NASDAQ is hurting the indexes.
Shark Strategy On Apple Stock and Facebook Stock
My shark trading options trade on Apple Stock is doing very well covering the drop from $700 to today. I will be adding the shark trade on Apple Stock (Symbol AAPL) to my new members section shortly. It is also in play on Facebook Stock (Symbol FB) I hope others will study the shark option trading strategy for their own use.
INTC Hanging On & Rolling In The Money Naked Puts
Meanwhile $INTC is hanging in right in the core of support. If it cannot climb beyond $22.50 though I believe it will probably break through $22. I will put up a new article this evening on rolling put options to avoid assignment as there has been lots of questions and comments about being assigned on in the money puts early. This has not been my experience. I had one set of in the money naked puts on MSFT for 7 years without any assignment including the 08-09 collapse and 1 set of 10 naked put contracts on RY Bank on the TSX for 6 years including the October crash without assignment.
Now that I have finished work on setting up my new members section I can get back to answering all the emails, questions and get up more strategy articles.
BMO STOCK and Covered Calls Leap Options
One comment though for fellow Canadians. I am writing an article on BMO Stock on the TSX. it trades on both New York and Toronto but options are better on Toronto. Look at BMO Stock and think about buying stock and selling the January 2014 $58 CC. The return is 10.77% which is less than 1% a month, but the strategy which I will finish up tonight or tomorrow is to roll those calls in the summer or Sept of 2013 out for another year. It works well and juices up that return even more.
The dividend is $2.88 annual and the Covered Calls are $3.45. This brings in 6.25 on a strong stock reducing the cost basis to $51.75. For those who worry, they could consider buying short-term out of the money puts, perhaps around $50.00 going out just a few months. Nov can be bought for .10 cents. Stay away from going too far out . To cover the cost of those puts, consider selling an April Naked call high up, perhaps at $64 for .25 cents which will pay for a couple of times having to buy puts. I will get this article out this week on BMO Stock and covered calls I swear!
KO Stock Put Selling Chance
Finally for Coca Cola Stock put sellers, I sold the $37.50 puts for Oct yesterday and sent out a twitter about it and mentioned it in last night’s column. I would be waiting here for the stock to pull back. I was surprised that the stock fell to $37.70 and then moved right back up to $38.18. I really thought it would fall to below $37.50. I am looking for the stock to get down to $36.85 to sell more puts.
Stock and Option Update Disclaimer
Remember you trade at your own risk. These are just ideas from an old investor and nothing more. Nice to see some volatility back in the markets.