The Money Tree

Safely Generating Income in Retirement

Posts Tagged ‘CPWM’

Deep OTM NP Strategy – March Week 1

Posted by mounddweller on March 12, 2011

Fellow Traders,

Nothing much to consider this final week before March option expirations.  Below is the list of stocks that met our screening criteria.  None of them jumped out at me as compelling, “must do” trades.

However, I do want to give you a “heads-up” on a stock that made our selection criteria back on March – Week 3.  You’ll recall Lorillard (LO) made our list that week.  It was down significantly on rumors that a report being filed by an independent commission to the FDA might lead to a ban by the FDA of all menthol flavored cigarettes.  I felt the odds of this occurring were slim to none and said so in my write-up here (https://troysmoneytree.wordpress.com/2011/02/25/otm-np-strategy-mar-week-3/).  As it turns out excerps from that report have been released and the results do not appear to be fatal to Lorillard or other menthol cigarette manufacturers.

However, for whatever reason(s), the premiums on LO options remain high.  The stock closed Friday at $79.35.  Yet, you can still sell the MAR $70 put for $0.74 and the $67.50 for $0.43.  Both of these have PFs > 2.0.  On Monday, I am going to enter an order to sell the MAR $70 at $0.70 or better. 

Best of luck to everyone this week and especially on expiration Friday.

Regards,

Troy

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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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