Option Investor

Option Writer Portfolio - September

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Goldman Sachs (GS) has been on my list as of late. It is a little pricier than most stocks we sell options on. However, GS is up on a down market day. Earnings are due out on September 19th. Analysts have decreased their earnings estimates on the financial related stock. But GS hasn't disappointed for a long time. If you don't know, GS the provides a range of investment banking, securities, and investment management services to corporations, financial institutions, governments, and high-net-worth individuals worldwide. It operates in three segments: Investment Banking, Trading and Principal Investments, and Asset Management and Securities Services. We are selling the September 150 Puts with a $2.35 target.

There is support is at 152 which correlates with the strike price. We are using the $152 support as the technical stop. A run up to $175 to fill the gap will be reason to sell the calls to hedge the put position. The max return is above the amount out of the money, which is on target.

Risk Management for GS
Strike Stop = $ 150.00
Cost Basis Stop = $ 147.54
Technical Stop = $ 152.00
% Above the Strike 7.69%

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