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)
About Dan Sheridan
Dan Sheridan traded in the pits of the CBOE for over twenty years and is still a weekly educator at the Options Institute in Chicago. He opened Sheridan Options Mentoring in 2007, and has since educated thousands of retail traders by relying on the methodologies and strategies that were crafted by current market makers.
Entries by Dan Sheridan
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.
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 […]
Around 11:30 central today, AAPL was at 199.66 -7.82 for the day. Friday was down pretty good also because of earnings. Today, I took a neutral to Bullish long term stance with AAPL and did a put credit spread instead of a very expensive cash secured put ( simply a short put). I sold the Nov 23 190 Puts and didn’t like the high margins of a short put, so I bought a 180 Put against it. I did the credit spread for 1.60 credit. A little less than 3 hours later, I bought back the spread for 1.16 Debit with AAPL near 201.5 at 2:17 pm central, a return of over 5%. My plan was to take 10%, that would mean buying back the spread for .80 Debit. But my impulsiveness had a hard time turning down over 5% in less than 3 hours!
(The below trade was put on earlier today in a webinar with ally invest.) Today around 11:30 am central, we put on an Iron Condor with SPX around 2760 and VIX just under 22. The trade was in the Oct 26 Expiration. B 1 2860 C, S 1 2850 C, S 1 2630 P, B 1 2620 P, total credit 2.20 , margin/risk $780. Plan is to take off for about 8% profit or 1.55 Debit. If spread goes over $3 get out for 10% loss. Dan Sheridan firstname.lastname@example.org
(The below trade was put on earlier today in a webinar with ally invest.) B 1 Oct 17 2930 C, S 3 Oct 17 2940 C, B 1 Oct 17 2950 C, 1.80 Credit, Risk or Margin $820. Max $180 credit on downside or 21% on Capital. Plan on downside would be to buy back the spread at 1.20 debit and make around 7%. If the SPX goes up to 2905, I might look to buy the 2930-2940 Call spread in the Oct 17 Expiration , to reduce my short Deltas.
Live RUT Calendar I put on during Sheridan TV today with RUT around 1715. B 1 Oct 5 1715 C, S 1 Sep 21 1715 C, 8.95 Debit. Look for 6% in next 1-2 days, sell out for 9.50 Credit. If spread goes under 8.30,down 8% get out. Thanks, Dan Sheridan
Spec Directional Trade with AMZN at $1961 -33. Bullish Butterfly looking for a slight rebound over next week. Sep 14 Expiration. Buy 1 1985 C, S 2 2000 C, B 1 2015 C, 1.20 Debit. Looking to sell this out for 1.60 Credit or higher. Income Trade in SPX. 15 day Butterfly in the Sep 15 Weeklys. B 1 2840 C, S 2 2880 C, B 1 2915 C, 13.15 Debit. Looking to sell out the spread for 13.95 credit or higher over the next 1-3 Trading Days. Dan Sheridan
558 Revere Ave.
Westmont, IL 60559
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