The Money Tree

Safely Generating Income in Retirement

Weekly NP Strategy – OCT 28 Exp

Posted by mounddweller on October 20, 2011

Fellow Traders,

I have three picks for you this week from our Weekly NP Strategy.  None have looming earning releases.  Here are my three choices this week:

First up is Alcoa (AA).  AA has already announced 3rd quarter earnings.  It has declined steadily since hitting a 52-wk high back in April.  It seems to have found a bottom, closing at $8.90 back on October 3rd.  Will it retest this low before expiration next week?  Who knows?  However, I think it is a fair bet.

Next up is Hewlett-Packard (HPQ).  It doesn’t announce earnings until November 21st.  HPQ as you’re probably aware has had a terrible year.  Since late February it has fallen from the high $40s to a low of $22.20 back on October 3rd.  HPQ closed today at $24.74.  We can sell the $23 strike for $0.21.  Almost 1% for one week of exposure on a stock that is already down 50% this year seems like a reasonable bet to me.

Last up is Silver Wheaton (SLW).  SLW doesn’t report earnings until early November.  It closed today at $29.73.  It has not closed below the selected $25 strike price since November 15th of last year.

Well, that’s it for this week.  I’ll be back this weekend to look at our monthly Deep OTM Strategy results and also look at our November selections.





One Response to “Weekly NP Strategy – OCT 28 Exp”

  1. Rich said

    Over the past two years I have been kicking the AA can down the road, month after month, picking up premiums but AA just kept on falling. I wasn’t losing money but not making much either. So last firday I took assignment on 2 Oct 16 puts. Figured it was time to pay the piper. Yesterday I sold 2 28 Oct 10 covered calls @ .55 and also sold to open 1 28 Oct 10 put @ .21
    so after the dust settles this friday I may have $3000 in cash to use the next week or 300 shares of AA. It will take some time but little by little I will be able to erase the loss on the assignment.


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