Seeking Alpha


Send Message
View as an RSS Feed
View optionmaven's Comments BY TICKER:

Latest comments  |  Highest rated
  • 3D Systems: Searching For The Bottom [View article]
    Come on. Do you look at options volume? On the Friday before the Barron's article well over 1000 put options traded while less than 50 call options for this past Friday. 5 day option? Did someone know that Barron's would have a cover story on the negativity of DDD and SSRS? Of course not. Then go back one week and see the huge volume in the puts of the first few expirations. No one knew that an article was going to 'dump' the 3D stocks - right? The gentlemen quoted in the article run hedge funds and they can be short. No one would look at their portfolio and trading from the last few one!

    Who knows maybe it was just coincidence that all those puts traded and were bought in quantity the day before the would never happen.

    Ask Hank Paulsen.

    just a watcher.
    Mar 16, 2014. 03:14 PM | 8 Likes Like |Link to Comment
  • Michael Dell's Offer Should Upset Shareholders [View article]
    10,000 or more options traded at $14 strike for Feb and March. In fact about 150,000 options traded between $13 and $15 strike price. Trade was for pennies. 5 cents to make $5 at $19. 100 x your investment. Have fun. or do a back spread if you think that Dell might go down again. 100 options would cost $500. Sell 1000 shares short at $13.65. If it went to $18 you'd make $40,000 on long calls and lose $4500 on short stock. if deal fell apart and stock went back to $12 you make $1600 on the short 1000 shares which pays for the $500 in calls.
    Feb 11, 2013. 01:28 AM | Likes Like |Link to Comment
  • Apple's CEO Discusses F1Q 2013 Results - Earnings Call Transcript [View article]
    If worried you can create an option situation that will profit by 20% if stock doesn't move from here and protect you for a fall of another 20%.
    Jan 24, 2013. 05:54 AM | Likes Like |Link to Comment
  • Attractively Valued Blue-Chip Dividend Champions For Your Retirement Portfolios [View article]
    One more example:

    ADP: buy 100 shares at 59.50
    sell the March 60 calls and 57.50 puts and take in $1.50.

    reduces cost to $58.
    dividend is March 12th before expiration. If you collect it because stock is not above 60 then you receive additional .43.
    Now cost is $57.57.
    1. if called away you make $2.43 or just over 4% for 2 months. Nice return. Average of 2% a month.

    2. If stock drops below $57.50 you will own 200 shares at average of $57.53. That's $2 below today's cost. 4% discount.

    Nice trade.

    Jan 24, 2013. 05:54 AM | 2 Likes Like |Link to Comment
  • Attractively Valued Blue-Chip Dividend Champions For Your Retirement Portfolios [View article]
    Excellent article. Now I will check out the options on some of these stocks to increase the return while holding the stock. If I can own these stocks that you mention and make an extra 5% to 10% a year that would be the basis of a very strong portfolio.
    Thank you for the list.
    Jan 23, 2013. 10:47 PM | 1 Like Like |Link to Comment
  • Attractively Valued Blue-Chip Dividend Champions For Your Retirement Portfolios [View article]
    let's use AFLAC as an example:
    buy 100 shares at $53
    sell the May 55 call and 48 put and collect $2.15.
    Reduces cost to $50.85.
    If stock goes up $2 or 4% you will make $4.15 or 8% for 4 months. That's without the dividend. You should collect two dividends in Feb. and May of another 70 cents. Your net cost would be $50.15. Call away at $55 if stock is over that level in May. Make about 10% for 4 months. That's 30% annualized.
    Risk: stock goes over $55 sooner. You make 8% for 1 month; or 2 months; 3 months. Even better return.
    If stock were to drop below $48 you would purchase another 100 shares. Now your average cost could be $49. 100 at 50.15 and 100 at 48. You are now down $1. Had you just bought the stock at $53 and it fell to $48 you would lose $5.
    Conclusion: Properly used and monitored you can significantly increase your income using options and the stocks suggested in the article.
    The OptionMaven
    Jan 23, 2013. 10:47 PM | 6 Likes Like |Link to Comment
  • For the first time in nearly 6 months, Facebook (FB +3.7%) is trading above $30/share. There's no specific reason for today's move, unless one counts an invitation for a Jan. 15 event that some think could feature a smartphone announcement. Shorts have been covering at a pretty rapid clip, and recent analyst commentary has featured plenty of bullish remarks about improving mobile monetization and the impact of new ad products. Shares are now up 54% since Facebook delivered its Q3 report. [View news story]
    I am the OptionMaven. Having traded options for over 40 years in OTC markets and as a member of the CBOE. My basic options booklet was printed by the NYSE; CME and CBOT. (30 years ago).
    What I can do is to take the opinions of your fundamental writers and convert those opinions into option trades or stock and option trades that have less risk and more reward then a 'naked' position in the stock.
    I have managed assets professionally for over 44 years. I am also a litigation expert on security, commodity and options frauds.

    My opinions are my own but I will try to explain all the potential outcomes of the transaction:

    The article is very bullish on FB. But it also states that the stock has rallied over 50% since its 3rd quarter earnings. And you have over 100 million of stock released to trade.

    Therefore if you would like to earn a nice return with little risk here is one options only trade:

    I. Buy the 31/36 March call spread for about $1.50 debit and sell a put that is around $27. Cost would be approximately 35 cents (before comm). Stock is currently $30.60 on close today. So if stock went up $5.40 you would make a profit of $4.65 or 90%. Yet on the other hand if the stock went down 10% or $3.50 to $27 you would only lose the 35 cents.

    Down $3.50 lose 35 cents.
    Up $3.50 to $34 you make $265. that's. a nicerisk/reward ratio and for just 2 months. .

    RISK: if stock were to drop below $27 you would/might be put the stock at $27 but you would save buying stock at $30.60. **note that you can keep rolling the short put down as the market moves.


    2. Buy stock at $30.60. Then sell the JUNE 31 call and JUNE 25 Put and collect $5.20 in premiums. that reduces your cost to $25.40. (the cash goes into your account)>

    Outcomes: stock goes over the call strike of $31. You make $5.60 or 20% for 5 months. That's 48% annualized.

    Stock stays the same: you make $30.60 - $25.40 or $5.20. $5.20 on $25.40 almost 20%.

    Stock drops $5.60 cents to $25 you lose 40 cents instead of $5.60.

    Stock drops below the $25 put price you will now own 200 shares (assume bought 100 and now put another 100). Your average cost of 200 shares would be $25.20. That is a discount of about 18% to today's price.

    Conclusion: If you are happy making 20% if the stock goes up1% then this might be for you. Remember to make 20% if you just outright buy stock the stock would have to go to $36.72. Now you make the same 20% if the stock stays the same.

    If you had bought stock and it retraced its run up you would lose 20%. Now you don't lose.

    Changes the risk/reward profile completely.

    Give up any additional upside. If stock rallies 25% by June you only make 20%.

    Hope you enjoy these comments.

    My email is:
    Jan 10, 2013. 03:09 AM | Likes Like |Link to Comment
  • Disappointing Numbers, But Walgreen Is Turning Around [View article]
    why take a chance and buy it at $36.50?

    Using options you could invest just 40 cents. An option spread costs $40 and you control $3650 of stock.

    Buy the April 37 call and sell the April 34 put for a 40 cent cost.

    1. If all new investments work out the stock goes to $40 or higher.
    2. If the next quarter is a failure you buy the stock at $34.40 or $2.15 below stock price. that's about 7% discount.

    Results: Stock goes to $40 and you paid $3650 for stock. Profit of $350 or about 10%. Stock drops to $34 and you lose $250 or 6%.

    Option results: Stock goes to $40 and you make $260 on a $40 investment. That's 600%.

    Stock drops to $34 and you lose $40 instead of $250.

    "Properly structured option trades can make you more if right and lose less if wrong".

    (no commissions were calculated in this example)
    Dec 26, 2012. 10:34 AM | 3 Likes Like |Link to Comment