Google disappointed investors in several ways on Thursday and the stock was knocked for a -$30 loss in afterhours.
Google posted a 23% rise in quarterly revenue but failed to hit the whisper number. Also causing hard feelings was a nonstandard 3 line press release and the announcement the CEO, Eric Schmidt, would no longer take part in quarterly conference calls. Everything about the earnings riled analysts and investors and the stock dropped from the $595 close to $565 in afterhours.
This monster drop in Google put pressure on the futures and it appears we are headed for a negative open on Friday. It is possible Google's mistakes could be the one rotten egg that runs the entire omelet.
I am raising stops again to protect our gains. I still believe we will see additional market weakness by the end of next week so an early exit would be fine with me.
Current Position Changes
WYNN - Wynn Resorts - Closed
The Short May $80 Put was closed at the open on Thursday @ $2.84 for a loss of -.24 cents.
Check for stop loss changes in the portfolio graphic.
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.