A lot of that conviction came from short covering but earnings produced that short covering.
The move higher did not come soon enough for Cliff's Resources. We were stopped out on Tuesday early morning dip for a minor 40-cents loss. I probably set the stop too close because I was concerned about the lackluster market.
After today's rally most of the current strikes are well below the stock price. However, Wynn Resorts lagged today's rally after Goldman gave them a price target on Tuesday of $88 and that was exactly where they were trading. They moved down -1.63 today in a bullish market. I am recommending we close that position at tomorrow's open. It is currently a breakeven at $2.61x$2.69.
I raised the stops on nearly everything else. We could close all the positions today and have a good month so I don't want them to fall back into the loss category.
Current Position Changes
CLF - Cliff's Resources - Stopped
Stopped on Tuesday for 40-cent loss
WYNN - Wynn Resorts - Close
Close the Short May $80 Put at the open on Thursday.
Check for stop loss changes in the portfolio graphic.
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.