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 to give trade ideas here but to explain the rationale behind the trades. If you want to see the trades in real-time, follow me on Twitter or Stocktwits. I will try to keep writing these posts as a regular segment – They will add insight into my trading strategy.
I found all the trades in the Option Samurai options screener – so you can use the scans to find similar trades yourself.
My first trade I published was a long call on $Bidu. I found it on OptionSamurai when I looked for good stocks with low IV. I entered the trade because:
- Low IV
- 3% Max loss compared with holding a similar position in stock
- break even is only 1.5%, when ATR is about 2.5%
- Had almost till the end of the month
- I thought that 200 would serve as a support
Went long call $BIDU – Really low IV, only 3% max loss &break-even 1.5%. analysis: http://t.co/ZqduADLJ5y #stocks pic.twitter.com/6mJPmQjJxZ
— OptionSamurai (@OptionSamurai) March 3, 2015
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.
interesting earning play: $FL -sell Put 52.5 – BE at support. analyze: http://t.co/2NoRYGq4Sx .Can also sell call 60. pic.twitter.com/rLel7PYSOp — OptionSamurai (@OptionSamurai) March 4, 2015
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 cents 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 $PM with a price point of 80$. This represents a 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 a dividend (5 days later), and sell an OTM Covered call. Even if I don’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 in my opinion.
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 into my trading style when analyzed over time. Hope you can learn from it.
Do your own due diligence.
- Check out our Trade log update with more than 150 trades (and an 87% win rate).
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