I checked the futures this morning and saw the markets were headed higher as Motorola (MOT) helped lead the way. Since I sold five naked puts on MOT worth nearly $10,000 in underlying value (12% of my account balance) last week and was in the money on them after yesterday’s close I was excited to see such good news in the headlines praising MOT. I clicked on the Yahoo! Finance link and saw the following headlines which made me glad I had already noticed the stock was up $0.75 in pre-market trading.
Headlines can be so misleading that you must read the details of the story before jumping to conclusions based on the headlines that try to stir emotions. If I would have only read the following headlines and not the story I wouldn’t have know if I should buy back my naked puts, buy new puts and sell covered calls or even consider buying calls on MOT. Reading the details lets me know I can sit back with the naked put options I’ve already sold and ride it out through December expiry with much less stress.
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