We are on the way to our best month ever if the market gods don't jinx us next week.
Friday's surprising recovery from the payroll numbers should have been the last straw for anyone still committed to being short the market. All we need now is one more good day to breakout to new highs all around and the reluctant bulls should join the party.
The continued rally has shrunk the premiums and Monday should see another three days marked off the premium calendar. I added suggested exits on every short term position and based on Friday's close we could exit several if Monday is strong.
The FTI position hit our exit target on Friday at 15-cents and we exited for a $1.35 gain.
After three days in rally mode I fell like if the program is not broken, we should not try to fix it by adding any new plays. Three days in rally mode has also shrunk the premiums of anything we would want to add to the portfolio and a single down day could cause us serious pain.
I believe the best course of action today is just play the cards we have been dealt and hope to exit all profitably next week.
Current Position Changes
New Aggressive Recommendations
New Long Term Recommendations
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 please let us know.