For those who don’t read Barron’s (you should) the format is pretty basic. It generally comes in two sections unless there’s a special. Each section starts with one or two long articles summarizing the past week’s market activity. Following the summaries are more in depth articles on individual stock picks or pans and some follow-ups.
This week all three summaries painted a fairly bearish picture. (Admittedly, Kopin Tan who is often the bullish one of the bunch didn’t write this week.) On page 13, Michael Santoli pointed out that even with a potentially believable bullish case the markets are up 10% in a month and 15% since the intraday low on August 16th.
On the other hand, a few of the stock picking articles seemed like they have ideas that could work out.
RRD – Writen about on page M4. The premiums aren’t worth selling options. I might have to think about buying calls based on the 25-30% upside Barron’s thinks it could have within the next 18 months.
CVS – Writen about on page 21. These premiums could be worth selling naked puts, but I’d like to target the December expiry which aren’t available yet. Hopefully it will wait before climbing too much too soon. Otherwise I might have to buy calls farther out based on the 20% growth potential CVS has over the next year.
NOV – Writen about on page 25. The premiums are rich on NOV. Selling naked puts seems like a good move here. They report earnings next Wednesday, the 24th. I might wait until after that which will mean there’s less risk and less return. Volatility will plummet after earnings are announced. A trade early after the announcement could still pocked good gains. The article figured 15-20% upside remains in it for the next 12 months. A play to avoid the earnings announcement is to sell October puts that expire at the end of this week, before earnings are announced. Small risk, decent return. The current bid and ask show it’s already heading higher. If you are not reading this post on www.mytradersjournal.com you are reading it from a site that has plagiarized it.
FTEK – Writen about on page 26. Closed at 26.46 on Friday, but the current bid and ask show it’s already heading higher too. The article said it could go as high as 40-45 in the nearer term and even 100 in 2-3 years. I’m thinking of buying calls, but at a minimum selling naked puts seems safe.
NTDOY – Writen about on page 51. No options available, aka not optionable. With a possible 25% upside, I might have to consider this as a buy and hold for my IRA.
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