The Money Tree

Safely Generating Income in Retirement

Deep OTM NP Strategy – AUG Week 5

Posted by mounddweller on July 17, 2011

Fellow Traders,

As is usually the case we have a wide selection of trades to consider in this the first week of the new expiration cycle.   Please also notice that this is one of the 4 times a year when we have a 5-week cycle.  Here is our list of opportunities this week:

As you can see I have highlighted the two opportunities that I think are worthy of your further consideration.  Both IDCC and RVBD have appeared previously in the selection list.  I also have written about them before.  You can read those write-ups here

IDCC: https://troysmoneytree.wordpress.com/2011/05/29/deep-otm-np-strategy-june-week-3/

RVBD: https://troysmoneytree.wordpress.com/2011/02/25/otm-np-strategy-mar-week-3/

Both selections have good support at their respective strike prices.  However, if I had to choose one over the other I would go with IDCC.  It trades at a more reasonable P/E and pays a small dividend.  If the market hits a rough patch and I were to have IDCC put to me I would feel more comfortable than I would with RVBD which trades at a very rich forward multiple of 33x earnings.

Have a great week!

Regards,

Troy

 

 

 

 

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2 Responses to “Deep OTM NP Strategy – AUG Week 5”

  1. Vijay said

    Aloha Troy,

    Many many thanks for 2 superb picks (IDCC and RVBD). Your scans are awesome !!
    I got into IDCC (8/40P) and only wish I had sold many more Put contracts,
    I was not able to get a fill on RVBD. I also sold Puts on EXC (8/40P) after doing my DD and on GS (8/115P).
    As evident, all my positions are deep OTM and so whilst the premiums are low (averaging 1.5-2% per month), I sleep a lot better. Thank you once again for sharing your deep OTM strategy..

    Vijay

    • mounddweller said

      Vijay,

      You are quite welcome! I very much enjoy researching good CC and NP trades and writing about them in my blog. I look forward to doing it ‘full-time’ when I retire from my day job.

      Best of luck to you on these and any future trades.

      Regards,
      Troy

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