Option Investor

December Option Position

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EFA - Previously, I made a case that foreign stocks may eventually be favored more than US Stocks either because of the devaluation of the dollar or the scenario that stocks and sectors that are the worst performers often become the leaders in the next cycle. Foreign stocks, as an allocation, have had an even worse year so far than US stocks. The original trade from Sunday was to sell the December 36 Puts for a target price of $0.70. However, EFA gapped open lower and provided a better entry price. I may have left out the point that the original trade was to be a total of 3 contracts. Since there was a gap that needed to be filled I suggested selling half of the full position until the gap was filled. If you normally trade 10 contracts, you should sell an additional 5 contracts. The current price is still about $0.75 per contract.

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