Here is an Options trading Strategy from my fave Dan Sheridan of C B O E, giving us a free trade on Target. Its an Iron condor however he calls its a split butterfly, well that’s just a matter of opinion. Whats good about it, that target is a non volatile stock and the earnings are due on November 17 Th and it should be a good play to make some money. I myself would initiate this trade on behalf of Dan Sheridan’s timely input, and I wanted it to bring it to your attention, the least I could do, so you can make some money. Its a Free trade so enjoy it.
The markets sold off heavily towards the close down 332 points, profit takers and hungry traders going home with pocket full of change to pay for milk and coffee. BEFORE that happened GOOGLE shot up to 324 and as a lurking opportunist I took profits, and I was right. Right after that Google fell apart in the last hour sell off and went down to 310 and I immediately sold another batch of puts in the selling vortex 3 minutes before the bell. Given below is a free trade. The last trade is good for next 1-2 trading days.
11/13/08 SELL 5 GOOG DEC 250 PUTS @6.60
11/14/08 BUYBACK 5 GOOG DEC 250 PUTS @5.40
Net profit = $ 1.20 x 5 = $600
11/14/08 SELL 5 GOOG DEC 250 PUTS @7.00 Net credit = $3500
Theta= $25.34/day
Delta= 7.41
Probability= 85%
GOOGLE held up really well in today’s onslaught and the chart patterns look very promising. We shall exit or adjust this trade should GOOG close below 300. Our short strike is almost 60 points away to do any damage. I expect coming week we should see GOOG in the 330-340 area.
IF you were a subscriber you would have access to all these trades in real time sent to you. You could be making money right here, as I have since yesterday. Go ahead and subscribe today!
The market dropped beyond October lows in a horrendous plunge down to the depths never seen since 2001. The plunge was brutal and insane and reminded experienced traders how not take anything for granted. I was on the sidelines watching and seeing great stocks getting decimated. One of the great stock was Google which traded down to 280 and it was a moment that seemed ridiculous enough. A worldwide company with best looking fundamentals on the books and this indignity..
But soon the market rallied hard from the lows and ended up 550 points up at the close. Google vaulted 21 points to 310 well above the round number 300 which it broke a day earlier. Based on this market action, and the bullish move -here is the trade we made today on GOOGLE. This is how you can buy Google on the cheap or may not be able to.
SELL 5 DEC GOOG 250 PUTS @ 6.70 = $3,350 Net credit to the accounts
Delta -6.7 Theta = $ 60.53 /day
Probability = 84%
GOOG has to drop 62 points before December to create any damage.Well than again we’ll be buying GOOGLE at $ 250- $6.70= $ 243.30. That may be a great bargain if we get the stock assigned! So we sold naked puts and if you would say we have unlimited losses, that is not correct. I would love to own GOOGLE at 243.30 and while I wait for that to happen, I need to get paid for waiting, because I am very choosy, and I buy only the best companies, with top notch fundamentals.
Should things do not work out as we imagined or if I change my mind, or if GOOGLE drops below 300 in a nasty sell off, I can always buyback these puts not more than 50% of what I paid for and call it a day. You can exit the trade and still wait for another opportunity come your way, but I doubt GOOGLE will get that low again before December 2008. Just remember, you are collecting almost $60.53 daily if GOOGLE just stayed where it is now, twisting and turning with the market and that amount is collected by you when you buyback those puts and exit the trade.
