There was some severe volatility in July and if you didn't pick the right days to enter the rest of the month was a killer.
July started out strong but all the gains came in the first week with some monster short covering from the June decline. If you missed an entry point in that first week then there was little left to trade.
We escaped July with a minor fractional gain. The Goldman Sachs gap lower cost us -1.30 and a major portion of our earlier winnings. The Carbo Ceramics loss on the gap down was also painful.
With August ahead conditions could get worse. August is the second weakest month of the year although it has been known for some short but sharp gains. Unfortunately, I believe we could be facing a market that will weaken as we move into August.
No Open Positions
July Recommendation History
Click here for June Results
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.