Goldman Sachs rebounded on the strength of the Warren Buffet support over the weekend.
Goldman shares rebounded +4.30 on Monday to close just under $150. We got a decent entry on Goldman and hopefully it will stick.
Potash spiked into the green at the open to trigger the play but then crashed for a -1.43 loss. I raised the stop loss in case this is a new trend.
Wynn also rose at the open and kept rising all day to add $3.64 for the day. We have a good entry on Wynn but the option premium dropped slightly on the opening spike. I raised the stop on Wynn as well.
CREE spiked higher at the open and never looked back. Since we were selling a call we wanted a negative open to institute the play. Since CREE was never negative the play was never triggered and it is now cancelled.
ATI rallied at the open to pull us into the position then collapsed to stop us out at $54.25 by late morning. The option was 90-cents at the open and $1.05 at the exit so there was only a minimal loss.
Despite today's +143 gain in the markets I am still worried that the gains won't stick. Today's high was another lower high and without a continuation move tomorrow I think the bears will be loading up again. Today's rally was prompted by short covering thinks to the Greek bailout and that is old news now.
I am going stand aside on adding new plays until we see what happens to market direction.
Current Position Changes
ATI - Allegheny Tech - Stopped at $54.25
Short May $50 Put @ $.90, closed at $1.05, -.15 loss.
Check stops on all positions
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.