The Money Tree

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Posts Tagged ‘CLWR’

Deep OTM NP Strategy – FEB Week 3

Posted by mounddweller on January 30, 2011

Fellow Traders,

My apologies for the delay in getting this posted.

The pick-up in volatility this past week resulted in a corresponding pick-up in the number of selections from our strategy.  This week we have 12 new selections (5 mid-caps and 7 small-caps).  In addition many of the selections from last week reappeared this week.  I’m hopeful continued volatility will result in some large-caps making our list in the coming weeks.  Despite the great record of the overall strategy it is very hard to blindly sell puts on some of these smaller companies.

Here is the list for this week:

Have a great week trading.  I’ll be back again next weekend with another round of picks.  I’ll also keep you in the loop with regard to other CC and NP trades that I make outside of this particular strategy.

Regards,

Troy

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Deep OTM NP Strategy – JAN Week 3

Posted by mounddweller on January 1, 2011

Fellow Investors,

HAPPY NEW YEAR!!!

Below is the list of stocks meeting our selection criteria for Week 3 of the JAN option expiration period.

While proper execution of the strategy calls for us to sell puts on each stock meeting our criteria, this isn’t always practical.   The selections this week show one reason why this is true.  Four of the 5 stocks have a premium of $0.05.  Thus, unless a substantial number of contracts are sold it is difficult to generate a reasonable amount of income net of commissions.

The MBI trade looks interesting and a reasonable bet.  I’m using ‘bet’ literally.  MBIA is not a stock I’d like to own.  It certainly has a cloud over its head.  However, from a trading perspective, it might be worth a look.  The stock popped up this week and the $10 put  looks reasonably safe.

A quick word about IMMR.  I have held this stock in my long-term investing portfolio for several years.  They are the undisputed leader in haptics technology, having been awarded 500 patents for this technology.  No real news to explain the jump in price over the last few trading days of 2010.  I wouldn’t mind owning more of this stock at $5.

One last item to note this week.  Several stocks that made our list previously this month met our criteria again this week.  Specifically, I’m referring to SIGA, VHC, ZLC, and VRGY.  Some at the same strike price while others were at different strike prices.  I eliminate them from our list because, assuming you sold puts for that stock earlier in the month, you wouldn’t want to “double up” on your risk by selling puts on the same company again later in the month. 

For those of you who didn’t sell puts on either SIGA or VHC earlier this month, you might want to to look at and consider both the $11 and $12 strike prices for one or both stocks.

Regards,

Troy

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