We were only successful in entering one of the two suggested positions on Monday. One of the candidates was never in positive territory to meet the qualification for entry.
We successfully entered the CREE aggressive put position at the open and chip stocks rallied strongly on the news fro China about a 38% increase in exports. I feel good about this position and it should continue to move in our favor.
LULU opened positive for about six minutes but then declined to negative territory for the rest of the day. The S&P was negative for the brief period LULU was positive so LULU did not qualify for valid entry. I am removing LULU from the recommended list. We have plenty of positions and I am starting to be concerned about the negative impact of the FOMC minutes on Tuesday's trading.
The minutes will not be released until Wednesday but the worry over what the Fed might have said coupled with the 100% rebound point on the S&P at 1333 could cause the markets to pause.
The S&P hit a low of 666.79 in March 2009 and a 100% rebound would be 1333.58. According to technical analysis by Gann that should be a decent resistance level.
We came within nickel of exiting the MOS position with our target of 25 cents on the option.
I did not change any stops. I am hoping we can get through Friday's expiration without any negative events. That should allow for maximum premium shrinkage by Monday.
Current Position Changes
New Long Term Recommendations
None - Waiting for a "real" market dip, not a one day wonder
Current Aggressive Recommendations
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)