Tuesday, June 16, 2009

Up 165% in 2009

It's been a really good trading year thus far for me and I plan on keeping it going. My trading strategy is filled with safeguards and protecting the downside while taking in income on a monthly basis.

Options expiration is set for June 20th (19th trading day) and I like to sell naked puts on the last week of options X. On Monday I sold Naked Puts ($7.50) strike for SVNT for $0.95. The stock is trading in the lower to mid $9's and this just seemed like a great play. If the stock is put to me at $7.50, my adjusted cost basis is $6.55 per share. So the stock has to drop almost $3/share this week before expiration for me to be under water.

Current CC positions: FAS, MBI, SVNT.
Current NK Put: SVNT ($7.50).

I'm writing a program to calculate at what point I need to buy long Puts as a protection device for my covered call plays. More on that later.
Happy Trading!

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