The market failed to maintain any forward momentum going into quarter end so it is time to exit gracefully.

The opening dip took us out of Amazon and F5 Networks for a nice profit on both. Mosaic and FCX missed hitting our exit targets by only a few cents.

With the markets down today, which should have been a follow through day, I am worried that the rest of the week could be rocky.

Rather than hold our breath and continue raising the stops let's exit the three remaining positions at Tuesday's open. That frees us up from worrying about the potential dip the first of October.

Exit FSLR, MOS and FCX at Tuesday's open.

Jim Brown



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September Recommendation History



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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)


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.