Stock Investment :New Position on NDAQ

admin — Wed, 26 May 2010 09:15:33 +0000

I mentioned earlier today that I had some more stocks I was eyeing for new naked puts. NDAQ was one of those. My last option strangle on NDAQ ended with my shares getting called away at .00. I took a loss on the shares and had to stay out of it for a month so [...]

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I mentioned earlier today that I had some more stocks I was eyeing for new naked puts. NDAQ was one of those. My last option strangle on NDAQ ended with my shares getting called away at .00. I took a loss on the shares and had to stay out of it for a month so I could write-off my losses and not be affected by the wash rule. Once my one month waiting period passed as of last week I started looking for a good entry point. I didn’t actually think today was the day, but entered a limit order well above the bid with the thought process that I’d get an odd dip at open one day within the next week or so. Now that my order already hit I’m curious if today’s final hour dive was a similar dip that won’t be long lived or the start of another step lower.

In the last few minutes of the day, as the market suddenly sold off, my limit order hit and while NDAQ was trading at .36 I sold three NDAQ July 17 naked puts for $content.65 each and received 2.86 after commissions. I almost sold the 18 strike puts for .00 considering the intraday low for the year is .64 and I expect that level, or close to it, to hold support. Since I wasn’t in a hurry to add more exposure I decided to aim lower, especially since I didn’t think the order would trigger so soon based on the price I targeted for the premiums.

NDAQ has a forward P/E ratio of only 8.31 and is close to its longer term trading channel bottom. If NDAQ is assigned I’ll most likely sell another strangle on it and will put myself in a position to buy another 300 shares even cheaper. If that second leg is assigned I’ll have to consider just staying long with no options as I’d expect another move in NDAQ to take it back above .00.

This trade puts me about 15% overinvested. If it looks like most of my June options will be assigned I’ll probably close some a few days early and take the losses and move on. I have three and a half weeks before I have to make that decision and a lot can happen between now and then. The other option is to sell some July covered calls on those same stocks in the money and try to squeeze out some more profit before exiting the positions. I’ll have a few choices to make when I get there.

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Stock Market Investment :Options Expiration – April 2010

admin — Wed, 21 Apr 2010 12:14:20 +0000

After operating in a daze the past couple of weeks I happened to notice the date today and saw April options expire tomorrow. That got me to jump. I started looking at each of my expiring options (NDAQ, INTC, T, JPM and UCO) and making decisions on what to do. Here’s

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After operating in a daze the past couple of weeks I happened to notice the date today and saw April options expire tomorrow. That got me to jump. I started looking at each of my expiring options (NDAQ, INTC, T, JPM and UCO) and making decisions on what to do. Here’s how I’ve started and plan to proceed.

With all of these positions expiring worthless (assuming nothing insane happens on Friday), I’ll be less than 65% invested again and back on the trading path. The quandary I’m in is that although I’m feeling bullish I recognize that the markets have been on a long, barely broken run for the past couple of weeks and at some point we should get a small pull back. Most likely that’s going to point me to making moves like I’ve done with UCO where I enter my limit order and try to have some patience. I don’t think any pull back in the next month is going to be too great, so if my May options continue to work for me I’ll be able to keep rolling every other month without much risk.

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Stock Investment » NDAQ

Stock Investment :New Position on NDAQ

Stock Market Investment :Options Expiration – April 2010