Option Investor

Option Writer Portfolio - May

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MOS - The Mosaic Company (Mosaic) is a producer of phosphate and potash combined, as well as nitrogen and animal feed ingredients. The Company operates its business through four business segments: phosphates, potash, offshore and nitrogen. The company reported earnings recently and has been in a nearly vertical climb. Today, the stock gapped down then moved higher and is mow starting to pull down again. I think it is losing momentum and want to sell the 150 Calls for May. Once the stock dips lower we will sell the puts.

This is an aggressive trade already. So the max marginers can only sell 2 contracts. We are getting about a 34% max return on the initial margin. That's pretty good. While we are still 15 bucks out of the money, this stock has the capability to run higher. If the stock fills in the 129.93 gap we may sell the 120 puts.

Risk Management for MOS
Strike Stop = $ 150.00
Cost Basis Stop = $ 154.60
Technical Stop = New High
Premium Stop = $ 148.00

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