We closed the position on Potash at the open for a $1.09 profit.

I think we escaped Potash just in time. The stock lost another 34 cents today and is wedging down for a potential break of support at $120.

The option opened at $1.50 and that is what we will call as the exit even though it traded at $1.31 a little later. Using the opening print we captured a $1.09 profit from the $2.59 entry price.

Potash Chart

I am changing the exit targets on both Mosaic and Cree to 50 cents. I am expecting the market to weaken on Thursday if not before. I would be perfectly happy to take profits here and go into month end flat.

Jim Brown

Current Portfolio

Current Positions

MOS - Mosaic
Bid to buy back the option at 50-cents or less.
Maintain the stop loss at $57.50.

CREE - Cree Inc
Bid to buy back the option at 50-cents or less.
Maintain the stop loss at $68.50.

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)

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.