The market implosion at the open triggered some more exits. Thank goodness for stop losses.
The $8 drop in crude prices from Monday's high killed the Flowserve play with the stock down -$4.34 today. We lost 75-cents on that position.
Equinix hit our stop at $91.45 for a breakeven and DNDN hit the stop at $37.75 for a 48 cent gain.
The last two weeks have been tough with several losses. I am in no rush to replace those plays we lost. The markets could be rocky for the next several weeks so we need to go into bunker mode until a new trend emerges.
Current Position Changes
CF - CF Industries (Stopped)
CF was stopped at $135.75 with the option trading at $1.55 giving us a gain of +1.45.
New Long Term Recommendations
New 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)
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.