Verticals: Long vs Short

A RUT 15 Day Calendar

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 very toxic and volatile now and not for the faint of heart. This also is an 11 Day Trade, Dec 7 expiration. My Plan is to buy the spread back for .80, I sold for 1.39 credit, that would be a 7% return on my $861 Capital. If AAPL continues down , would exit trade if the spread hit 2.25. That would be a loss of 10% on my capital of $861.

Our once a year November Online Class Sale ends Friday!  We are offering 33 % discount on all online classes, whether you buy 1 or 5. Great opportunity to pick up some extremely practical classes at a great price!

Thanks, Dan

Blog Update on AAPL Put Credit Spread  11/28/2018

Monday, Nov 26, Sold AAPL Put credit Spread when AAPL was around 172.50, the Dec 7 155/165 Puts for 1.39 Credit, bought it back today with AAPL at 176.35 for .63 Debit. Capital and Risk was $861. We made $76 on $861 or 8.8% return in 2 days for every 1 contract.

Thanks, Dan

 

AAPL Cash Secured Put Alternative

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!

Bearish Natural gas spread

UNG, the etf for natural gas is trading near highs not seen since the middle of last winter. A short term bearish butterfly looks interesting  here to take advantage of a pullback that may be coming. As I write this, UNG is trading around $26.60. I am looking to place the trade below at a debit of around $1.30 per contract. Looking to close the trade at either a 10% profit or a 10% loss. Looking for UNG to decline to the $25 to $26 area in the short term.

Nov 2nd expiration:

Buy one 28 put

Sell two 25 puts

Buy one 22 put

 

Mark Fenton

mark@sheridanmentoring.com

Live Iron Condor in SPX

(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

dan@sheridanmentoring.com