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Post by Admin on Jan 9, 2015 1:14:15 GMT
Credit received: 0.35
Current price: 44.99
Experimental trade
Thoughts:
If you're short 1 put can you put an order to sell shares simultaneously or in the future at a price only if you're put stock? thoughts.
For example:
At 1 day to expiration IF stock is near your short strike:
stock is: 44.99.
Short Put ABC 45.00
Credit 0.3,
Break even: 44.65.
would putting in an order to sell at 44.99 and a Buy stop at 45.01 in order to lock in your profits?
1) Put in short order at 44.99.
if it stays below 44.99, you'll automatically be put shares at 45.00
- because you're -100 shares @44.99, you will be 0 shares, with credit of $0.29
- must have stop loss at 45.15 to 45.25.
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Post by Admin on Jan 12, 2015 23:15:03 GMT
TRADE UPDATE: TD 45/42.50 1% ROC This trade was experimental, so it did not really have a high success of completion. Trades should be figured out using the Daily and weekly charts (as they are more accurate in long term IMO).  Retrospect: The trade was established, when TD pulled back to the Mid point support on the Daily chart (see Red arrow). A thing to note, which I did not at the time, was the price move was rejected and did not form a new high, instead it reversed to the mid support. I guess this can be seen as a bearish signal? When TD pulled back to that mid point (pink line - bisecting lines may not always work. explained below) of approximately 46ish. I established a Bull put spread at the 45 strike, even though my expectation was that it would travel to the lower support below the 46 line; that and, my strategy is to establish bull put spreads at the next area of support. So, I did this, although the pink line wasn't based on anything concrete, I just bisected it thinking there was going to be a bounce. So while I did execute my strategy of selling at the next level of support, I should've been a little bit more cautious in establishing S/R lines. My chart also suggests that the stock may hit 42.50 area as its reverting to the mean of the channel. Although this is a failed bull put spread, I'm not against owning the shares with a 4% dividend anyway. If put the shares, I will sell an ATM call on it for credit, with the objective of keeping credit. Long term this is a fairly decent stock to own. Canadian banks are generally pretty conservative. Things to note in the future: 1) Be more cautious when establishing support lines for Spread strike targets. Strictly use IV ranges i.e 15/30 day ranges and try to have a position that expires within 2 weeks. 2) do not force trades. This trade was an exception because I like the stock and the dividend rate. 3) pay attention to rejection levels. This needs more research, as this is highly speculative and not consistent either. For future: Next support target 1: 44.00 - if breaches 44.00 it will likely continue lower. Next support target 2: 43.30 - if breaches 43.30 it will likely continue to 42 area. 42 area is also a good buy. 4.3% dividend at this point. 30 day range calculated @46.91 - expectation is approximately 44.75 to 49.50 Ideal spread: Bull put spread 42.50/40.00 Maybe there will be a rebound from current market levels @44.91. If that happens I'm expecting a bounce to at least 45.30 if this holds, then 45.75 and if that holds 46.75. Will wait to sell the call in feb 1/2 weeks out. The stop loss in place for this once above 45.00 will be 45.15 and will increase that. This needs further analysis.
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Post by Admin on Jan 16, 2015 0:23:50 GMT
UPDATE JAN 15, 2015
A second Bull put spread was entered at 42.50/40.00 levels for a 0.15 credit. Stock moved lower.
Current average price is 43.55 between the two spreads.
Long term dividend play, 4.22% div yield
future action:
1) sell call position, once it hits desired price target of 45.00. Will reinvest the dividend into shares to reduce cost basis.
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