The put option on Mosaic traded as low as 41-cents today and well under the target of 50-cents. That gave us a profit of 80-cents on the trade.
We only have one open position left and that is CREE. I thought seriously about closing it at the open on Thursday but decided to raise the stop instead. I think we should be safe to take a stop out without losing any money.
I am very cautious on the market over the next ten days. We should see some volatility around the jobs report and maybe some rally attempts from the end of quarter cash from retirement accounts. After those events I am expecting at least a minor decline. I want to keep the portfolio flat to avoid that volatility and leave us plenty of margin to sell the dip for our next round of premium collection plays.
We had a very successful month with total premium collected of $6.68 not including the open CREE position.
MOS - Mosaic
Closed at 50-cents or less for an 80-cent profit.
CREE - Cree Inc
Bid to buy back the option at 50-cents or less.
Raise the stop loss to $69.00.
March Recommendation History
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Click here for January Results
Click here for December Results
Click here for November Results
Click here for October Results
Click here for September Results
Click here for August Results
There are several different formulas for determining margin requirements for naked put writing. These are normally broker specific and some can require larger margin requirements than others.
Here is the most common margin calculation for naked puts.
100% of the option premium + ((20% of the Underlying Market Value) - (OTM Value))
For simplicity of calculation simply use 20% of the underlying stock price and you will always be safe. ($25 stock * 20% = $5 margin)
Prices Quoted in Newsletter
At Option Investor we have a long-standing policy prohibiting the editors and staff from actually trading the individual recommendations in order to conform to SEC rules concerning trades.
The prices quoted in the newsletter are the end of day prices in most cases.
When discussing fills or stops the prices quoted are the bid/ask at the time the entry trigger or exit stop is hit. This is NOT a price that someone on staff actually got using a live order.
For entry/exit points at the market open the prices quoted will be the opening print. The majority of the time the readers are able to get a better fill than the opening print because of market maker bias at the open.
For trades with an opening qualification the prices quoted will be the bid/ask at the time the qualification was met.
All of these rules normally produce worse prices than an active trader would normally get. Because they are standardized there may be some cases where a price quoted was better than an actual fill. If you received a price that was dramatically different than what was quoted just send us an email and we will use your price.