Futures are up +8 points Sunday night on news that the Basel accords did not add anything new and stringent to the bank capital package.

This pretty much guarantees a gap open for trading on Monday. I had a list of nine potential new positions but I am hesitant to enter the trades on a +100 point gap open. We have been trapped like that several times in the past year and it nearly always turns into a loss.

The gap open deflates premiums and then when the gap fails the premiums inflate again and we are stopped out.

Based on the +8 futures tonight I am not going to make any recommendations. However I am going to list the stocks I was going to play and the strikes. If you feel like living dangerously then dive in on your own.

I will reevaluate these nine stocks on Monday night and choose several to make active entries and probably with different strikes based on what the market did on Monday.

Jim Brown



Current Portfolio


No Open Positions


New Recommendations


These would have been my recommendations today with a normal open.


Check back on Monday night and based on market conditions we will enter some of these positions, possibly at a different strike.


Margin Requirements:

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)