I hate Monsanto’s practice of creating Frankenfood, but the company is a cash flow machine with a huge future of bringing in more money for investors. I don’t recall if I read about MON in Smart Money or Barron’s and will update this sentence when I find the article. MON is growing and has some huge markets to enter. I’ve been watching the stock for the past week and my trade trigger hit yesterday when it dipped below 60. I saw 60 as a key mark on the chart. Today it started up, showing that MON found support yesterday as I thought it would. With a forward PE of 28.76 on top of quarterly growth of 18.9% yoy and a PEG of 1.69, I don’t think there is huge downside risk with MON. Before I’m asked, I’ll answer why I’m investing in a company related to the Devil. They make money and I separate investments from social feelings.
While MON was trading at 60.39, I sold one July 60 put (MONSL). I received $219.75 after commissions. I think a covered call ITM would have been more profitable and offered equal risk. That’s going to be a new check for me before selling a put, to consider a covered call instead. Graphing the risk/reward is the same with either approach – downside risk (although reduced) is there and upside risk is limited. The difference is the cash output to buy the stock upfront. I figure I can handle some covered calls as a starting point with a mix of naked puts and still stay off margin.
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I should have known you knew price alerts! Turns out not alot of volume on july call trading for AMAT at 17 strike; I nearly reconsidered and bought my call back, thinking the stock will rise. I wanted it back at 2.20, and was always just a bit higher Friday. So i don’t have much to lose if it goes up or down, guess i’ll keep hoping for some down time in next 55 days, could try to get out of some of it though if the price is right, again for diversification, i sound lost now i guess…
See, i own too much, 2,000 shares at 19.56 cost. Did 20 calls at $2.25 for July $17 strike. If it calls out as such, i lose $600. If the thing will drop, i can close for some good cash, and begin writing $20 calls for the “rebound” and more profit. I hope this summer doesn’t make me look to silly. we’ll see. post script, i did make over $500 on May call for this stock in the first week i bought it
Kadena, do you keep a trader’s journal? Keeping a journal can really help eleviate that “lost” feeling you mention. For one it can help keep you from getting over committed to one stock or industry and also when confusion comes in to play you can look back to why you first entered the trade. If those reasons are no longer valid, dump it and move on. If they are still there, hold tight. Long term you are probably OK with AMAT, but I have no idea when it’ll come back.