Option Investor
Newsletter

4 New Trades

HAVING TROUBLE PRINTING?
Printer friendly version


The following four BULL-PUT credit spread plays are being added to our portfolio.

CMI -Cummins, Inc. engages in the design, manufacture, distribution, and servicing of diesel and natural gas engines, electric power generation systems, and engine-related products. It operates in four segments: Engine, Power Generation, Filtration and Other, and International Distribution

KBH -KB Home operates as a homebuilder primarily in the United States and France. It engages in the acquisition and development of land primarily for residential purposes; and offers various homes that are designed to appeal to a range of buyers, including first-time, move-up homebuyers, luxury, and active adult homebuyers

$SOX - The PHLX Semiconductor SectorSM (SOXSM) is a price-weighted index composed of 19 companies primarily involved in the design, distribution, manufacture, and sale of semiconductors service

OIH - Oil service Holders Trust - an oil, energy related play

CMI $85.62

SELL CMI-TP CMI August 80 PUT CREDIT= $0.50
BUY CMI-TO CMI August 75 PUT DEBIT= $0.15
NET CREDIT = $0.35
INITIAL "NET- CREDIT TARGET= $0.35 or $35.00
POTENTIAL PROFIT (x 5 CONTRACTS @ $0.35 = $175.00
MARGIN REQ. (x 5 CONTRACTS $2,675.00
RETURN ON INVESTMENT= 6.54%
Exit Strategy= If NET DEBIT = $0.75 STOP



KBH $81.04

SELL KBH-TO KBH August 75 PUT CREDIT= $0.70
BUY KBH-TN KBH August 70 PUT DEBIT= $0.30
NET CREDIT = $0.40
INITIAL "NET- CREDIT TARGET= $0.40 or $40.00
POTENTIAL PROFIT (x 5 CONTRACTS @ $0.40 = $200.00
MARGIN REQ. (x 5 CONTRACTS $2,700.00
RETURN ON INVESTMENT= 7.41%
Exit Strategy= If NET DEBIT = $0.85 STOP


$SOX $477.04

SELL SXX-TJ $SOX August 450 PUT CREDIT= $2.00
BUY SXX-TI $SOX August 445 PUT DEBIT= $1.55
NET CREDIT = $0.45
INITIAL "NET- CREDIT TARGET= $0.45 or $45.00
POTENTIAL PROFIT (x 5 CONTRACTS @ $0.45 = $225.00
MARGIN REQ. (x 5 CONTRACTS $2,725.00
RETURN ON INVESTMENT= 8.26%
Exit Strategy= If NET DEBIT = $1.00 STOP



OIH $112.57

SELL OIH-TA OIH August 105 PUT CREDIT= $0.80
BUY OIH-TT OIH August 100 PUT DEBIT= $0.35
NET CREDIT = $0.45
INITIAL "NET- CREDIT TARGET= $0.45 or $45.00
POTENTIAL PROFIT (x 5 CONTRACTS @ $0.45 = $225.00
MARGIN REQ. (x 5 CONTRACTS $2,725.00
RETURN ON INVESTMENT= 8.26%
Exit Strategy= If NET DEBIT = $0.90 STOP


We will be monitoring these plays for future adjustments. Since we are posting these while the market is closed, we of course don't know that they will still be available at our target credit spreads when the market opens. Don't panic if you can't get in the trade. We will keep bringing on new plays and we will not be tracking the trades that are not achievable. We know its been a little diffiuclt getting in on some of the recent trades and we are not going to leave you hanging.



Monthly Cash Machine Newsletter Archives