Trade post mortem – $BIDU, $FL, $PM

During last  week I mentioned trades on my twitter and Stocktwits accounts.  I’m summarizing them here to help keep a record. This is a post-mortem post – I don’t intend on giving trade ideas here but to explain the rational behind the trades. If you want to see the trades real-time follow me on Twitter or Stocktwits. I will try to keep writing these posts as a regular segments – They will add insight into my trading strategy.

My first trade I published was long call on $Bidu . I found it on OptionSamurai when I looked for good stocks with low IV. I entered the trade because:

  1. Low IV
  2. 3% Max loss compared with holding similar position in stock
  3. break even is only 1.5%, when ATR is about 2.5%
  4. Had almost till the end of the month
  5. I thought that 200 will serve as a support

I closed the trade with over 100% profit the same week.  The second trade  I published was an earning play on $FL. I thought I had enough margin of safety with 52.5$ put.  Not surprisingly I found the trade on Option Samurai when I scanned for earning plays.  

I felt that even if I get assigned, I don’t mind owning the stock and plus the stock is on support so I thought I might be able to exit on a bounce.

I closed the trade for 5 cent and profit after expiration (the stock went almost to $60)

The Third trade was selling put on $PM.

 

$PM sold put 80. on support and expire before div. If get stock will get it for div+on support. http://stks.co/j1uvV http://stks.co/t1e1s

— OptionSamurai (@OptionSamurai) Mar. 5 at 10:27 PM

I felt I had MOS and actually I wanted to own $PM with the price point of 80$. This represents 5% dividend yield. And I think that this company will grow its dividend in future years so for me even higher dividend yield.

I thought that I could get assigned, get dividend (5 days later) and sell OTM Covered call. Even if I won’t get assigned, I will still earn premium, and will try again.  With the stock dropping the next day I doubled my position. In hindsight that was a mistake, but I will still make money on this position IMO.

Used the drop on $PM to sell another 80 put. On support and exp 5 days before div. http://stks.co/g1vFO http://stks.co/t1eeR — OptionSamurai (@OptionSamurai) Mar. 7 at 06:12 AM

As always – This is NOT a recommendation. This is meant to be a record and provide an insight to my trading style, when analysed over time. Hope you can learn from it.

Do your own due diligent.

 

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