On Sunday I said we were having a pretty good month and I should not have said that. The market gods heard it and knocked us back a couple steps just to show who is the boss. I jinxed us by pointing out our gains.

The drop in crude prices to $79 caused a knee jerk reaction to all the energy positions. WLT, BHP and BUCY were stopped out for losses. I raised the stops on Sunday just in case we did get a breakdown in energy prices but we still lost a little on each position.

FedEx spiked +1.65 and the option premium dropped as low as 14-cents. Our bid for a dime should get accepted later this week if FedEx holds those gains.

Toyota rallied $1.10 to $78.15 and our $70 put is even farther out of the money but the premiums refuse to drop. Currently at 50-cents we need to put in a bid to buy back at 10-cents.

The Fed announcement Tuesday afternoon is sure to cause some more volatility so be prepared.

No stops have been changed.

Jim Brown

Current Portfolio

Current Positions

FDX - FedEx
Put in a bid to buy back the option at 10-cents or less.
Maintain stop loss at $84.75.

TM - Toyota
Put in a bid to buy back the option at 10-cents or less.
Maintain stop loss at $72.75.

New Recommendations


March Recommendation History

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

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)