These are the opportunities I’ll miss when I’m in a job that actually keeps me busy. When GM was off its early morning highs and trading at 35.80, I sold three November 32.50 naked puts (GMWZ) and received $317.75 after commissions.
GM finished the negotiations with their UAW union and seem to have found a win-win situation for both parties which can be really good news for investors. While I can’t imagine buying an American car due to their lower quality and overall “cheaper” feel than Japanese cars, many disagree and keep buying them it seems. Before anyone gets all pissy with me about bashing American auto workers, I’d like to point out that all of the Japanese cars I’ve bought since the early 90s have been built here in the United States by the hands of Americans (and our robots).
GM complained that higher healthcare costs put them at a disadvantage to foreign car makers. I think it’s a quality issue and at $30-35k for a new decent car these days, an extra $1k due healthcare cost or anything else GM wants to use as a smoke screen isn’t the reason I don’t buy American. Either way, GM has moved the healthcare costs away from their control and will have a one time check to write to fund these costs in the future. Just think, GM car buyers will save $20 per month on a $400+ car payment now. The buyers should come flying in now. I’m being sarcastic of course. I still think the stock is a good move, even if I don’t like the product. I even considered selling the 35 strike, but decided to lessen my risk with the 32.50 strike. Volatility for the GM options was at 47.80 when I sold and I think that will drop as the news settles in.
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