After writing about CRDN as one of Smart Money’s stock picks last week I sold one naked put on it this morning. While CRDN was trading at 69.39 my limit hit to sell one October 65 naked put (AUEVM) and received $169.25 after commissions. I had a limit in for two October 60 puts for the…
Updating My Goals
My wife and I are both losing our jobs within the next few months. My contract is ending and her company is being sold. We’ve planned well for the likelyhood of one of us being unemployed and have lived well beneath our means. The trouble is that we could both be unemployed by January if…
Trading Journal – Sanity Check
Every so often when I start feeling some fear of the market’s potential demise I second guess some of the trades I’ve made. I look in on my Ameritrade account to see that I’m down on a few positions and depending on my overall mood I sometimes start to fear making another trade because I don’t…
Keeping Greed in Check
I’ve written about the importance of keeping a trading journal numerous times. (It fits “My Trader’s Journal” title don’t you think?) Another key reason to keep a trading journal is to keep your greed in check. This journal should not be limited to only the stocks and options you invest in, but should also include a system…
Charting the Dow – 9/7/07
No bulls could say last week was fun. I personally took nearly a 2% loss on paper, but had no realized losses which is what actually matters. I’m not frazzled by that paper loss or my theory that the Dow will continue to drop to retest the lows from four weeks ago. That’s only ~600 points…
Keep an eye on Burlington Northern Sante Fe (BNI)
Warren Buffet reportedly has a 15% stake in BNI as of last week. This week’s Barron’s mentioned it and I saw it again on Forbes. BNI opened at its 20 day moving average and moved up from there, although still down for the day. The 50 day moving average acted as a ceiling earlier. I’m debating selling a…
Smart Money Stock Picks
Smart Money magazine generally offers some good stocks to consider investing in. I’ve been reading through the September issue and haven’t found any stocks that exactly match my research for good opportunities to trade on yet. I’m not saying they are bad stocks or they’ve done poor screening, but either the charts are hard for me…
How Put Selling Works, Part 2
This is a continuation of an earlier post found here. A common misperception is that most options expire worthless. This is not true due to people not exercising their options, but because some puts expire out-of-the-money and if a put is in-the-money, the calls at that same strike are out-of-the-money. In addition, many traders will close their…
How Put Selling Works, Part 1
I had a good exchange with a reader in the comments of a post from the end of July. He asked a good question that made me realize that a lot more people are probably wondering the same thing. In essence, he asked how does selling puts work. Since selling options, mainly selling puts, is the foundation…