A couple positions have reached the point where we should take profits.
The USO position was stopped out on today's dip for a breakeven. That is far better than the Goldman position but still no fun.
The Russell ETF (IWM) had a low today of 15-cents. I recommend we put in an order to close for 10-cents or less on Thursday.
The Dow Transports ETF (IYT) traded as low as 10-cents today. I recommend we put in an order to close that position for 10-cents or less on Thursday.
There is no material benefit to leaving the positions open and there is always substantial risk should the market lose traction ahead of the weekend. Just because there was a good rally today does not mean we can't roll over.
No new plays today although I seriously considered another entry on the USO. Crude at $75 ahead of next week's expiration is likely to find some buyers.
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.