We closed our last position for a profit leaving us flat over the holidays.

The bounce in CREE today allowed the short put to trade as low as 45-cents and easily hitting our 50-cent exit target. We entered the position at $1.25 giving us a 75-cent gain.

I am perfectly happy to be flat today. We may see a couple more days of gains due to the influx of retirement cash but I am very cautious about the market over the next couple weeks.

I want to keep the portfolio flat to avoid that volatility and leave us plenty of margin to sell the dip for our next round of premium collection plays.

We had a very successful month with total premium collected of $7.43. I am in no hurry to give that back.

Jim Brown

Current Portfolio

Current Positions

CREE - Cree Inc
Closed at 50-cents or less.

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.