Option Trades: Naked Puts Sold on ARRS, MRO and CHK
When it rains, it pours. After not selling any options for nearly two weeks (since the MON naked puts on 5/25) three of my limit orders hit this morning. Hopefully this is just the small correction I’ve been waiting for.
I sold four July 15 naked puts (AQCSC) on Arris Group, Inc (ARRS) this morning when my limit hit. ARRS was trading at 15.71 in the middle of a slide that’s still going towards to the bottom side of its trading channel which should offer support soon. I received $186.99 after commissions. This was one I wrote about a few days ago in my Barron’s recap.
I sold three July 35 Chesapeake Energy Corp (CHK) naked puts (CHKSG) and received $242.75 after commissions. CHK was trading at 35.88, 12 cents above the low of the morning so far. Jim Cramer mentioned this one a couple of nights ago. CHK is in the middle of its trading channel which should provide support before 35. If I had not had such a long break in trades I would have been more careful with this one and entered a higher limit. I think I’ll be fine, but see where I left money on the table.
I sold one July 125 Marathon Oil Corp (MRO) naked put (MROSZ) and received $489.25 after commissions. MRO was trading at 124.50, 35 cents above the low of the day so far. Jim Cramer mentioned this one a couple of nights ago. MRO is at the bottom of its trading channel and the 10 day moving average is around 123+-.
I’m down for the day overall, but with three new options opened I’m hoping for a good recovery over the coming weeks. If I sold these puts at market prices when I first looked at them I’d be down another few hundred dollars this morning, but I’m not because I was patient. I’m not sayng these are money in the bank, but I’m proud of myself for waiting for the prices to come down to where I thought they should be. I’m now fully invested (actually slightly over), but I’m so deep ITM on AAPL and RVBD that I’m allowing myself to go a little deeper. These three trades also balance me out again to have half my options expiring every month.
Technorati Tags: naked puts, investing, stocks, options, covered calls
Comment by Kadena
Good evening,
Today’s question is how similar is buying a call to selling a put? When you attempt to find good equities which will not get put to you, yet yield solid premium plays, how successful do you think a call buy on one of your plays would be? Perhaps a variation, like farther out strike date to allow for upward stock movement, not just avoiding stock price depreciation. (besides the obvious dollars at risk until expiratation)
Today’s second question: Have you heard of Lenny Dyskstra, the former big league baseball player? I found him doing deep-in-the-money call buys with good articles for thestreet.com, like under the options tab. His results look good.
Thanks for any comments.
Comment by The Trader
I’ll write a post on your based on your first comment because I think it’s an interesting question and it just came up with someone else yesterday too. In short, selling deep ITM covered calls are like selling OTM puts. Buying calls or puts are very different. I’ll explain more in my full post.
Yes on the second question – My friend who commented yesterday has pointed out some of his articles and has used some of his advice.