Comments on: Sold Qualcom (QCOM) Naked Puts

By: Alex Fotopoulos

Alex Fotopoulos — Tue, 29 Jul 2008 12:33:22 +0000

@ Kadena - congrats on the good trade.
@ Not Herbert - I don’t have a hard and fast rule for an exit stategy. I tend to watch each stock and make decisions on a more dynamic nature. Sometimes I’ll just exit the position for a loss and other times I’ll sell naked calls to try to pull a profit from it that way. Worst case I sit and watch my money vanish and wait it out. For QCOM, I like it long term and wouldn’t mind owning it if it drops before September expiration. Down to $43 would be tough to stomach, but I don’t think it would stay down that long. If it breaks support from where it gapped up is when I’ll sell naked calls on it. Then again, the upside could be somewhat limited in the near term too and I should probably look at the September calls, far out of the money.

By: kadena

kadena — Tue, 29 Jul 2008 10:33:16 +0000

May 06 QCOM was around 53 before crashing and burning to 36 or so. i hope it’s ready to rise from these levels so your naked sold puts clear, but that gap up recently scares me because of the principle of prices filling the gap, in this case back down again, but perhaps you are right Sept is pretty near. the overall market though still worries me, if it could carry everything down this summer

By: I_Am_Not_Herbert

I_Am_Not_Herbert — Tue, 29 Jul 2008 03:23:36 +0000

I’m enjoying your blog. I’m new to options and have been trying to figure out an option strategy. I’ve tried my hand at selling puts with WB, and got burned bad. In reading through what you’ve written, I don’t see that you have written up your downside exit strategy. Say QCOM dropped 2 points a day for the next five days, and then held at $43 until the September expiration of your Puts. How would you handle that?