put diagonal Archives - Options Trading Strategies for Consistent Income - OptionPundit

OPNewsletter (Dec’09) Up +10.7% (Open)

By | OP Newsletter, Option Trading, Option Trading Strategy, Past Performance, US Market | No Comments

OPN December 2009 portfolio is up +10.7% (still open). We invested 73.9%  of capital per portfolio spread and all the mini-portfolios are making money. The Iron condor sub-portfolio is closed for +14.14% gains. December portfolio’s weekly update is now available at the OP Discussion forum (Member’s only section). To access the Subscriber’s Page of the forum, sign on with your own username and password by clicking here.  We have already started opening income portfolio for Jan 2010 and will complete full portfolio in the coming weeks. OPNewsletter has consistently outperformed the broader market. Pls read customer reviews or If you…

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AAPL +35.6%; MCO +3.5%

By | Past Performance, Trade Ideas | No Comments

Basic members were alerted for 2 free trade ideas. One is closed for nice gains while other trade has been successfully rolled to next month. Starting with Moody’s (MCO) trade idea. The basic premise for that trade was shorting of Moody’s by hedge fund manager David Einhorn, who correctly questioned the health of Lehman Brothers four months before its collapse. I wanted a trade that will still yield profit even if I am wrong. The trade idea (An Option Trader’s Way to Short Moody’s) was first shared with the Basic OP Members (Membership is free until Dec 2009, click here…

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Green Mountain Too Hot to Hold

By | Trade Ideas | No Comments

Today Barron’s reported that GMCR may be too hot and investors should look closely at the company’s profits through purchases from royalty-paying licensees. A few weeks back I published my bearish bias contrary to what Zacks had (Aggressive Buy) and suggested two different ways to trade GMCR. With shares trading at almost 60 times earnings for the current fiscal year, investors should look closely at why earnings beat analyst forecasts by 40 percent while sales beat by only 8 percent, Barron’s said. The earnings increase was driven by an 85 percent increase in royalties the company gets from other companies…

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An Option Trader’s Way to Short Moody’s

By | Set-N-Harvest, Trade Ideas | 2 Comments

Shares of Moody’s Corp (MCO) fell sharply on Thursday after hedge fund manager David Einhorn, who correctly questioned the health of Lehman Brothers four months before its collapse, disclosed he was shorting the venerable ratings agency. His logic- the parent of Moody’s Investors Service undercut the value of its primary business — assigning grades to bonds — after giving AAA ratings to insurer AIG (AIG), mortgage banker Fannie Mae (FNM), bond insurer MBIA Inc (MBI) and other companies later revealed to be badly overextended. Now neither I have as much resources nor as close information as David may have. But…

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Who is defying The “D” word

By | Trade Ideas | One Comment

In such a market when almost every other counter is falling apart, it’s hard to imagine that there might be a company that is defying gravity day after day. It has rounded-up 78X returns since the great bull started in Oct 1998. Talk about technical indicators and everything is probably going to tell you, it’s overbought, and by the way, it has been so for time and again, dare you touch it? And last guess who might be defying the “D” word, a Coffee company, check them out here. Green Mountain Coffee Roasters, Inc. (GMCR) is engaged in the specialty…

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Put Diagonal Spread- An Income Startegy to Play Downward Move

By | Option Trading, Option Trading Strategy | 2 Comments

The Dow has still been unable to regain the important resistance of 11,750 (few points here and there). It danced around that level for a while before falling like a hard rock. In this post, while I shall be sharing about Put Diagonal Bearish startegy, I shall also briefly touch upon current market state. Dow is around 11,100-200 and the next level of key support is 11,000 followed by the July 15th low of 10, 827. As I mentioned earlier, the real important area to watch is 10,697 or so which is almost a 50% retracement of the bull market that…

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