The FedEx option finally traded for a dime and that closed out that position for a 63-cent profit. With FedEx at $90 and the strike at $80 for a March option that market maker was really tight on those pennies. It should have gone to zero last week.

The Peabody Energy play started well with a $1 gain in the stock after opening just a couple cents higher to let us enter the position before the premium started to decline.

The Toyota $70 put should be the next one to close now that TM is closing in on $80. I am raising the stop to $75.75 just in case.

Green Mountain should follow since the $80 strike is nearly $20 out of the money today. I am adding a recommendation to close today and raising the stop to 90.25.

Stops have been changed on some positions.

Jim Brown

Current Portfolio

Current Positions

FDX - FedEx
Closed at 10-cents for 63-cent profit.

TM - Toyota
Put in a bid to buy back the option at 10-cents or less.
Raise stop loss at $75.75.

GMCR - Green Mountain Coffee Roasters
Put in a bid to buy back the option at 25-cents or less.
Raise stop loss at $90.25.

New Recommendations

None Today

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)