Busy day folks, lets dive right in...
HSY - First off this morning I set up an August 95/90 put spread in Hershey's. It's real simple people, I'm looking for a safe and steady play for August, and this low beta, slow moving stock provides just that. However we do have earnings coming up, but the stock is well off it's 2014 highs of $107, and I feel like the $95 range is a good area of support. So I really like this risk/reward set-up. I played one contract, collecting a total credit of $103.
Next up, MA... I tried something a little different on this one folks, instead of playing a credit spread - I played a DEBIT spread. So it's a bit of an experiment, but this was a play from the Najarian brothers. I recently ordered their book, How We Trade Options, and with that order I got one free month access to their website, OptionMonster.com. This MA trade comes straight from them, except they played a Jan15 80/85 call spread. I adjusted it just a bit this morning on the pullback and played the Jan15 expiration, buying the 78 call and selling 83 call for a total debit of $172. So my max loss on this play is $172, and my max gain is $328.
It's a longer term play and we'll see how it turns out. But again I'm trying something new and looking to learn different ways to take money out of the market using options.
FB - Well this probably won't be popular with all you FB bulls on Stocktwits, but then again I'm not trying to please anyone. I sold my 100 shares of FB this afternoon. I got in last week at $66.08, looking for a ride back to at least $68. Well you know how that turned out! Back on Tuesday this thing got whacked! I held through the dip, biding my time for a potential exit. So today I got out at $65.01 for a total loss of $114.89.
Look, I'm a long term FB bull, but I had to balance out my risk. I'm lower on cash than I'd like to be, PLUS I'm short a July 67.50 FB put! So I just had WAY too much buying power AND capital tied up in FB. I simply thought it prudent to remove some of that risk.
On to KO... I rolled out my July $41 covered call to a November $42 call. I picked up an extra $6 of premium on the move. So in total I've got a $55 credit. Yeah I get it, it's chump change, but I own 208 shares of KO ($254 in annual dividends), so that's like an extra quarter's worth of dividend payments. Hey, every little bit adds up!
This morning I put in an order for a IWM August 114/113 credit put spread. My thought at the time was that the IWM had sold off hard over the last few days and we were due for a bounce. I was right! Unfortunately I missed getting filled by a PENNY! I placed the order when the IWM was trading right around $114.25. The bid/ask spread on the trade was .36-.43. My limit order was for .40. Then the IWM dipped down to $114.05 - I watched the spread tighten to .39-.41, but it didn't fill! The next thing you know the IWM turns and heads up. I missed my chance!
Then yesterday, I had an order in on a BMY August 47/46 credit put spread. I missed that play by a couple pennies as well. Today BMY moved up 1.23%, which is pretty impressive considering the day we just had.
So what's the lesson? Maybe I shouldn't be so stubborn? Sure, but at least I tried to get these plays filled. That wasn't the case last week with WMT & PG - I never even put in an order. And look at the kind of moves they've had over the last 7 days!
For all you folks out there finding this blog for the time, I'm the Option Rider. I play with a wide open hand, for better or for worse! Please feel free to look through my open positions, my winners, AND my losers. Any advice, thoughts, comments or helpful tips are welcomed at firstname.lastname@example.org.