We actually came out pretty good on the market roll over today with only one stop loss hit.
The market did exactly what I was worried about. The opening gap lasted until 10:AM and it was all downhill from there. I an actually surprised there was not a bigger loss since the Dow tested 10600 and failed. We could easily have ended up with a triple digit loss to 10,340 or below. I am really glad I did not add any plays on Sunday. We would have been filled at the high of the day and everything would have been in the loss column before the close.
With the FOMC meeting starting on Tuesday there is a cloud over the market. I seriously doubt anyone expects any change in rates but when the FOMC is in session there is always the concern about an unexpected move. I am not going to add plays today either due to the market uncertainty.
We lost the Interoil play when the stop loss was hit at $52.50. The option was trading at $1.05 at the stop and we exited for a minor 44-cent profit.
The rest of the plays did well. U.S. Steel was up strongly at the open on the Chinese move and gave back some but still ended up +1.56. Wynn Resorts also ended with a +1.83 gain on the anticipated strength in Macau on a yuan float.
No stop changes today.
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)