Foster Wheeler (FWLT) Naked Puts

FWLT is one of those stocks I like to keep coming back to. It’s volatile enough to give good premiums and profitable enough that I don’t see a complete wipeout in their future. They missed earnings today which made the stock drop more than 10% at open. I saw the headline and was happy I hadn’t gotten in yet back when first reconsidered it. I forgot that I had a limit left in play for the April 65 strike (UFBPM), the low range of the current long term trend.

With volatility spiking on it this morning, my order hit while FWLT was trading around 70 and I received $309.25 after commissions. My limit was for $3.00, but TD Ameritrade helped me out this time and I got $3.20. It traded as high as $3.40 before FWLT came off its lows and I moved to a paper profit.

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Read more on Foster Wheeler, Historical Volatility at Wikinvest

Comments (3)

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3 Comments

Comment by Options Strategery

Thanks for letting me know about FWLT drop. I tried to pick up an small position at 3.90 (Shifted HD hedges to XHB) but apparently that was too greedy. Will try again tomorrow.
Comment by Alex Fotopoulos

Careful with FWLT still. It dropped deeper after I posted. I think it could go as low as 65-66 before hitting that rising uptrend of higher lows.
Comment by Options Strategery

Tried again today on the April 60 for 3.00 but didn’t execute. Same game tomorrow, I suppose.