September turned into a good month and I am happy to be back in cash and waiting for an October dip.

We successfully exited the FSLR, MOS and FCX positions at the open on Tuesday and that turned out to be the best plan. The market drop would have probably stopped us out at a higher price over the next hour.

The exits today gave us a 100% positive month and a profit of $6.37 over seven positions. We did not suffer any losses although we broke even on Walter Energy.

I am happy to be in cash and waiting on October. If we do get a dip in early October I am going to back up the truck with some short-term October positions and some long term Dec/Jan positions. I expect a rally from any October dip that will follow through into early December.

We may need to be patient on making our next set of entries so be prepared.

Jim Brown

Current Portfolio

New Recommendations


September Recommendation History

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Click here for October Results

Click here for September Results

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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 please let us know.