Something went wrong with the last post and I can no longer edit it so forgive the typos. We’ll pick up where we left of and it’s not a bad idea to keep a watch list anyway in a separate post so we can keep adding trade ideas in the comment section. Of course these plays aren’t just for the $100KP – just because you like taking more risk than our conservative portflio doesn’t mean there’s no room for a few “safer” plays, especially when they are designed to put cash in your pocket….

We had our watch list from Aug 23rd, and we did miss a few chances so this week I’m going to put up some wishful entries that we’ll be looking for. For example, We’d like to buy GE $13 (now $13.87), selling Oct $13 puts and calls for $1.80 nets $11.20/12.10. Now, I don’t care if GE is $1 or $100 nor do I care what the Oct puts and calls sell for, what I want is the combination of GE stock and the sale of the Oct $13 puts and calls that equals $11.20. Right now that combo totals $12.05 so there is no way at the moment but on Tuesday, that was the price as we dipped to so the idea isto simply be prepared to pull the trigger next time.

To be clear, it’s the NET we focus on and if you can put in an offerat that price, great. Otherwise we just watch for an opportunity to buy something wewant when it’s on sale. Since we have a $100K portfolio and we don’t want to commit more than 10% to any position, we generally want to keep our entries on a first round at around net $2,500 so for GE above, we’d buy 200 shares. Here’s some other trades of interest:

HRB tends to have a poor fall so we patiently wait fo a chance to sell 5 Oct $15 puts for $1+, currently .25.

MHP held $28.50 on a big volume drop. If we can sell 5 Oct $25 puts for .70 (Thursday’s high) that’s a nice entry ($24.30 net).

TASR got the sell-off we were hoping for and we can pick up 500 shares for $4.50 (now $4.60) but we have to go on faith and just sell5 Oct $5 puts for .60 so net $3.90 on that spread is our goal. When they get back…
continue reading