Entries by Dan Sheridan
Live Calendar Trade in SPX
With VIX dropping a lot in the last few weeks, I like a Calendar today. I bought 1 Oct 4 Weekly 2980 Call and sold 1 Sep 27 Weekly 2980 Call, total Debit 6.80 ($680). Goal is to make 10% of Capital or around $70, would sell out Calendar for $7.50 Credit for Profit. Max Loss would be about 12% or around $85. If Calendar got to $5.95 or lower, would get out. My Oct 4 expiration of my longs is 25 days from now and my short Sep 27 Weekly is 18 days from now. At what point over the next 2-3 days, before the max loss, would I look for a possible adjustment or just get out for a small loss and possibly re-position my Calendar? Upside about 3005 and downside 2950. Thanks, Dan Sheridan
SPX Iron Condor
Yesterday during a webinar with Ally Invest, I put on an Iron Condor in Sep 27 expiration, 46 days out and with 5 wide credit spreads. Sold 3070 Call and Bought 3075 Call. Sold 2660 Put and Bought 2655 Put. Total Credit $1, and Risk $400. Looking for 10 percent profit on $400 of risk or Capital and don’t want to lose more than 15% of $400. Dan Sheridan dan@sheridanmentoring.com
NFLX: Pre-Earnings Calendar
NFLX 374.20 around 11:20 central on Monday June 24. Buy 1 July 19, 375 Put and Sell 1 July 5, 375 Put for $9.31 Debit, Margin/Risk $931. Earnings are the week of July 15-19, probably July 17. NFLX has been range bound since late Jan-early Feb, between $335-$385. Looking for that to continue till it doesn’t! We are buying an expiration affected by earnings and selling an expiration that will expire before earnings. The Implied Volatility of long strike should stay high and go higher and Implied Volatility of Short should not go up much and eventually go down. Goal is to get out of trade by Friday. Looking for 7-10 % return on Capital of $931 and don’t want to lose more than 10-12% of the Risk/Margin of $931. Will take off trade for profit of around 8% when the spread goes to around $10.05. If spread narrows because of a big price move, will exit spread for around an 10-12% loss when the Spread trades $8.30. Our 9th annual Chicago Seminar with 13 speakers is September 5-6 at the beautiful Gleacher Center in Chicago. We are running a special bonus this week for those who attend live, clink […]
MSFT Cash Secured Put Alternative ( Put Credit Spread)
Yesterday I sold the MSFT Jun 21 115-105 Put Spread for .75 Credit. Today with MSFT at 122.47 +2.43, the spread is trading at .52. The risk or Margin on the trade is $925. We are trying to make 6% of the Margin or Risk, $55. For a Profit, I will have an order in to close for an .20 Debit. If MSFT goes back down, I would exit the trade if the spread exceeds 1.70. I can link both orders with an OCO .MSFT Cash Secured Put Alternative ( Put Credit Spread)
Live Fig Leaf (Long Diagonal) Trade in WMT
With WMT around 98.75 , I bought 1 Jan 11 94 Call and Sold 1 Dec 14 98 Call for a 3.91 Debit. Looking to make around 10% on this trade, so I would sell out for 4.30 Credit. If the spread trades under $3.50, a loss of 10%, would get out.
Cash Secured Put Alternative in AAPL
Do I love AAPL at these prices? No! Does it feel like trying to catch falling knives and trying to pick a spot where AAPL will bounce? Yes! I am taking a short term contrarian position with a put credit spread in AAPL. Do I think this is the best candidate out their ? No! I like the price charts better in the following stocks for Cash Secured Puts: CMG, MCD, UNH, ULTA, VMW, AZO, CI, CME, AAP, NEE, CLX, ANTM, and others. Looked at Put credit spread earlier in AZO, but liquidity stinks! Easier to go to AAPL and it’s great liquidity , than sort through other less liquid candidates with much nicer bullish price charts. Back to AAPL and my purely short term contrarian play. The Trade is B 1 Dec 7 155 P and Sell 1 Dec 7 165 P for 1.39 Credit, AAPL was at 172.35 . The risk is $861. Right after I did the trade, AAPL dropped to 171 area and the spread was trading at 1.64! As Charlie Brown would say, Ugh!Now at 12:30 central, stock has come back to 171.90 -.39 and the spread is trading around 1.42. Bottom line, AAPL still […]