Fannie Mae (FNM) has been rocketing up today. It broke through the ceiling around 25 that was the 20 day moving average and a downward tilted trend line I drew. I tried selling naked puts early in the day, but kept my ask out of reach of the climbing stock. Finally, while FNM was trading around 25.90 I sold two April 25 naked puts (NJWPE) and received $538.50 after commissions.
FNM is up to $26.45 at 1:50 today. Between 25 and 27 is my sweet zone where I’ll take full profit on both. My April calls are at the 27 strike. My profit zone stretches all the way out to 29.06 to the upside and down to $20.87 to the downside. If FNM climbs more tomorrow I might have to sell another naked put or two, but want to ride this out a little farther before taking on too much more risk. I think it’ll keep bouncing around, but today is such a big up day, so far.
I didn’t want to sell more than those two puts until after the Fed announcement also. Everything could flip again before the day is over.
Does this mean yesterday was a capitulation type of a day?
Great day, but I am hesitant to believe that this is not just a bear market rally. On paper my long positions are looking better; I also bought back my AAPL $115 puts locking in $4.00 (no Alex!! I am not rubbing it in re; AAPL!!); After 2 days of gains, I did buy DIA puts today – the chart shows we are just about touching the downward trendline of lower highs. Who knows!! just in case. Be well.
Yep, loved today (outside of FNM). re: AAPL – LOL, I’m actually considering another move on AAPL. I’m not sure if yesterday was actually a capitulation day or if today was much more than a short covering day after some good earnings news. We have a long way to go before we’re too excited.
Every stock on my own (and recently owned) list was up except for HUM and it was up yesterday. It’s like it has to do the opposite of the masses. I’m actually considering selling a deep ITM covered call on it in my IRA. I’m weighing it still.
With Friday options expiring these next three days will be MAD, as if that will seem any different.
Markets closed Good Friday.
Quadruple expiration this week. Index options on Wednesday. Equity on Thursday. Good luck.