Apple shares rebounded from the overnight lows but the bounce was anemic and shares closed on the low of the day.

We entered a QQQ position at the open on hopes the -$30 decline by Apple after the close yesterday would be bought by bargain hunting investors. There was some buyers but there were plenty of sellers as well with volume of more than 39 million shares.

The QQQ opened near their lows and never bounced. However, support at 56.75 held. I am adding a stop tonight at $56.45. EBAY and WYNN both missed earnings after the bell and that could further pressure the Nasdaq on Thursday.

WYNN reported earnings of $1.05 that were better than the 27-cent loss in the comparison quarter but they still missed the $1.18 analysts expected. Revenue was up +30% with a +42% jump in revenue from Macau and a -8.3% decline in revenue from Las Vegas. Shares of WYNN declined to $123.75 after the announcement. We have a stop loss of $119.75. I considered closing the position but this is a $105 put. We are well out of the money and WYNN did rebound somewhat after the initial dip. I am leaving the stop in hopes WYNN's bullish conference call attracts some bargain hunters.

I checked on the earnings dates for the other short term plays and DLTR is 11/17, SHLD 11/17, HPQ 11/21, SD 11/03. All the rest of the plays are longer term and we will ride out any earnings swings.

Jim Brown

Send Jim an email



Current Portfolio


Current positions


Current Position Changes


QQQ - Nasdaq 100 ETF (Add Stop)

The Nasdaq did not rebound today thanks to a weak performance by Apple and others. I am adding a stop loss to the new QQQ put.

QQQ Short Nov $56 Put, add stop at $56.45


New Short Put Recommendations


None


New Covered Call Recommendations


None


New Long Term Recommendations


None


New Aggressive Recommendations


None


Existing Play Recommendations


Links to original play recommendation

BAC - Bank of America (Long Term)

BAC - Bank of America (Update 8/31)

BZH - Beazer Homes (Long Term)

MDR - McDermott International (Long Term)

BK - Bank of New York Mellon (Long Term)

NVDA - Nvidia (Long Term)

SD - Sandridge Energy (CC + Long Term Combo)

YHOO - Yahoo (Long Term Combo)

HPQ - Hewlett Packard (Aggressive Short Put)

PHM - Pulte Homes (LT Leveraged Combo)

SLV - Silver ETF (Short Put)

XOP - Oil Exploration SPDR (Short Put)


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 please let us know.