Mike Phillips

Mike Phillips
Contributor since: 2011
Company: PowerOptions
Price of CAT breached management point of $83, rolling to Nov 70/75 for a net credit of $0.19.
Set new management point of $78.
Management point of $37.7 breached, so looks like rolling to the 2013 Jan 31.25/35 can be accomplished for a net credit of $0.40 and an increase in the capital requirement by 50%.
Set new management point of $36.40.
RHT at $59.42 on Fri which is above $45 strike of short put option, so winner, winner, chicken dinner!
FDX stock price was at $90 which is above $80 short put strike, so winner, winner, chicken dinner!
Thanks
Hit management point, exiting bull-put credit spread and replacing with protected covered call, as Fossil's earnings are fast approaching.
Yes, this is a bull-put credit spread, but is much more leveraged than a protected covered call/collar.
I would only enter the bull-put credit spread after a company has released earnings.
Have any further commentary on this?
Don't understand buy 1 vertical put?
do you mean?
sell 700 call x2
buy 720 call x2
sell 550 put x1
buy 530 put x1
Unfortunately, I did not see this until today. Could have executed the protected covered call/collar mentioned in the article. I assume the 4 May 19 $400 call options are long, if so, these could also be protected in a similar manner.
You could also purchase put options outright, but in general I don't recommend this, as the protection often comes right out of your pocket.
OK, article is fixed, thanks again for flagging the problem.
Yes, put option is buy, will get this changes as well, thanks for the catch.
The article is change now, thank you for you comment.
The reviewer of the article changed the title, and yes, I agree the title needs to be changed, so I will attempt to change it.
Sure!
I'm advocating using the collar or protected covered call during the earnings release. After the release, holding a long position should be fine.
As to the PCC without being long the stock, an investor could purchase an out-in-time call option to represent the long stock, but that's beyond the scope of this article.
Yes, stock is owned. Stock can be existing uncovered stock or specially purchased for entering covered call.
This position already has a protective put, so it doesn't really need an additional put option, although the put option can be rolled, but typically in tandem with rolling the call option.
Now, for a plain covered call, buying some "cheap puts" on a rally makes sense, although it reduces the potential return.
When the stock increases for the covered call, the time value gets very small, so the position should either be closed to take the profit or rolled for additional income. This trade is a collar, so it's possible the put option can also be rolled when the call is rolled, basically locking in profit and setting up to receive additional potential return.
Thanks!
I agree the PBMs seem to be an unnecessary middleman, but a combined Express Scripts and Medco could put Walgreen in quite a bind, at least temporarily.
Rolled initial put spread to a 2012 April 55/60 put spread for net credit of $0.12 with new management point of $62. Article posted related to new position.
I like that - WAG and RAD.
I too like cc's on dividend paying stocks, but in general, the strike price of the cc needs to be several months out-in-time, as the dividend is "cooked into" the shorter time-frame call options and also in the put options for collars.
berlow, the bull-put credit spread is highly leveraged. The potential returns can be very large, but the risks are very large as well.
My gut feel is their report will be ok, but maybe not as great as some think.
Yes, but transitions typically take at least six months to be realized.
Sorry, thought I was commenting on another article, should have said can roll call option to another option. Put option can also potentially be rolled to another put option. Options can be rolled up/down and/or out-in-time.
Can roll to another option position, can potentially roll out-in-time, or even roll to a bearish position with calls, lots of potential roll scenarios.
David
Just give your broker a call, they should be able to get you going. If not, there's lots of other brokers that support options.
Mike
I like very large companies, ETF and Index options for this strategy, would stay away from small companies.
Here's an article about insurance with the $VIX:
http://bit.ly/yaeTb0
Main thing is to select vix call options that are somewhat out-of-the-money.
Mike