There was about ten days of positive market in June and we capture profits before the decline.
June rallied from the ninth to the 21st and we managed to use that period to capture some profits from selling puts. The $2.63 total was not earth shaking but it all counts.
We correctly realized that the market was weakening around the 21st and tightened the stops to take us out on the next dip. Once the decline began we remained flat through the end of the month and watched the indexes give back -7% over the later third of the month. We watched from the safety of cash. I realize it is boring not to be trading but it is better than being panic stricken from losing positions.
Our concept is to trade when it is profitable to trade and watch from the sidelines when the odds are not in our favor.
June Recommendation History
Click here for May Results
Click here for April Results
Click here for March Results
Click here for February Results
Click here for January Results
Click here for December Results
Click here for November Results
Click here for October Results
Click here for September Results
Click here for August Results
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.