Posts
Now that I am almost a month into this, my enthusiasm still remains pretty high. I thought I would show you a couple trades that are now closed, just to give you an idea of what you might find as a subscriber.
Generating More Than 100% Returns on the SPYder
The first trade that I will share with you is one that was open on the SPYder, an the ETF fund that approximates the S&P 500 index. The trade was opened October 10, 2007. This was the day before the index hit its recent peak, just prior to this latest round of selling.
The Strategist service recommended the purchase of 10 November $159 put options. With the underlying at about $156 per share, a stop was placed at $157.70, with a profit target setat $151 per share. These put options cost $4.25, so the cost to enter the trade buying 10 contracts was $4250.
The position was closed on October 24, 2007. The profit target had been reached and the puts were sold for $9 dollars per contract, or $9,000 in gross proceeds. This translated into about 111% return on capital. Not bad for two weeks ork!
Grabbing Over 120% In Three Days
Another trade during the month of October was on BRCM, consisting of a long strangle. The position was opened on October 8, 2007 with the purchase of the October $37.50 call option and the October $35.00 dollar put option. Earnings were scheduled for October 19, 2007. Implied volatility was low, allowing for an inexpensive entry, and a triangle pattern was present.
On October 19, 2007, the long call expired worthless. However, on October 11, 2007, the put option was sold for substantial profit producing little over 120% profit on the trade.
These are just two of many trades that have been identified by the traders at Options University. finding and planning trades such as this, picks a fair bit of skill and quite a bit of time. I know, because I've done it.
What options University strategist provides is an alternative, whereby professional traders will do the "grunt work" for you and issue to trade for your consideration. If it looks good do you and fits your particular needs, you need only place you're with your options broker.
Modifying Trade Recommendations for Your Portfolio
You may find that the number of contracts being traded by the service may be too few, for too many, for your portfolio. I don't see any reason why most of these trades cannot be sized up or down. In other words, once receive a recommendation it is always your prerogative to decide how best to apply the recommendation in the context of your individual trading plan. If your plan calls for a maximum risk of no more than $1000, you might not trade and contracts but simply limit your position to one or two contracts.
Tomorrow's a start of a new month, so it is time to reflect back on your recent trades and determine how you have fared. If you find that you are in need of some assistance, you might want to consider enlisting these services of the traders at Options University.
Trade well!
Christopher Smith
TheOptionClub.com
No comments:
Post a Comment