Lets take a look back at the "ISRG" Trade From Nov 3rd

When I put this trade on, I did my due diligence and checked the fundamentals and the technicals, and my feeling was this stock is too cheap at $120. What I wasn't thinking about was how redemption's are going to effect the market and over swing to the opposite direction, in this case the market will swing to the downside further than it should.

As part of my due diligence I looked at the technicals and here is a Quote from that day " I really don't know what can go wrong that will knock this stock back down that low, but they seem to have a technical support at $127-$130-ish per share."

What I didn't anticipate was the extreme sell-off to come, but based on my technical and fundamental research this is a long term hold stock for me if I get put.

If you look at today's chart on this stock it came down to 126.98 and then bounced off of the technical support I felt it had right there and went back to 130. Will that technical support hold? I don't know, but what I do know is that nothing has changed since I put this position on and that It is unfolding the exact way that I said it may.

So, only time will tell if the selling forces are fierce enough to push it below the 127 mark on the close and then I'll just watch my money go away for a while until the market has time to digest the overselling, but lets see if the technicals hold on.

Well were at the close at ISRG Technicals couldn't hold against the selling pressure, just amother example, IMHO, of throwing the baby out with the bath water. I assume that people are still going to want minimally invasive surgery and they own that market, so I'm stuck in the Bears grip just waiting for it to let go. Still hasn't busted through the strike, but with the way the market continues to behave, I'm not so sure that I won't owning this stock at $80 or less before seeing it really rally again. Like I said earlier, I'm not put the stock yet though and until the fat lady sings on Friday, I'm just short the puts.

I really don't mind owning this stock at the 120 level, I just hate the overselling that I believe is taking place in the meantime. But I love to pick up the bargains. What can I say, It's a Love - Hate relationship I have with the markets these days and any value investor is feeling the same way. If I didn't have a 5+ year outlook, I'd be much more dissatisfied with the way the market is behaving, but by having a longer term out look it sure smells of a good time to look for bargains and when I get put on some, I really should be happy, but I get frustrated that the stocks even sell down as far as they do.

Bought and Sold Google Options for a profit of $900 (less Commissions) Today. Not too big of a daytrading day for me. I was trading the 300 strike puts and the 310 strike calls. I Traded a total of 40 contracts in and out.

Trade for 11/14/2008

Sold to Open 3 Nov22nd Puts on ISCA 25 Strike @ 1.00 even bringing into my account $300 before commissions. This stock has seem to have found a bottom here because I believe that it wasn't held by too many hedge funds so they don't have redemption selling pressure associated with many of the big names. Also they have come down from there 52 week high of $44.75. And even if some hedge funds do own it, I believe that they will sell higher priced stocks which make it easier to pay their clients the money, than to sell the now $25 Stock. The company is into speedway motor racing and "As of November 30, 2007, International Speedway owned and operated 13 motorsports facilities in the states of Florida, Alabama, Michigan, Virginia, California, Kansas, Arizona, Illinois, South Carolina, and New York". Here's my take on this stock and the reason that I wouldn't mind owning it. First from what I understand about 50% of their revenue is from media broadcasting for which they have locked in contracts over the next seven years or so. Secondly, they get extra revenue form ticket sales, concessions and merchandising. There is a lot of capital investment that goes into building these speedways so entrance into the market by other players, especially in this hard to borrow market seems minimal, limiting their exposure to competition coming in. Also, the fact that ticket sales may drop due to the recession is already priced into this stock, remember, I believe that 50% of its revenue is already locked in with media contracts. If tickets sales were to goto zero, which I don't believe will happen, there stock has already dropped by almost that much. Finally, I like the fact that their overhead on an on going basis is not that high, as they do not have to stock up on product to sell in order to make money, all they have to do is continue to have races and bring in money and because of that they have just started paying a dividend to give back some of the excess cash that they are bringing in. I also believe that they have been buying some of their stock back at these prices which would reduce the float and make each share worth more.

In an economy like this, when you have a stock that is starting to pay a dividend and is buying its stock back with its excess cash, I just have a hunch that this is a strong company that will not only hold on, but make money for years to come, recession or no recession.

So I sold the puts, only 3 of them only because of the GM scenario, where the market can get crushed if GM shuts down and unemployment skyrockets. So, I am only dipping my toes into these stocks and hopefully buying on the cheap on the way down. Will GM go bankrupt in the coming week? I'm not sure, but I hope not.

Their debt is minimal compared to their earnings, therefore I do not see them losing money and finally, there year over year quarterly earnings growth for last quarter was a staggering 307.60% according to Yahoo Finance Key Statistics on this company, yet they are only trading at 9.8% forward PE. I just can not help but be long term bullish on this company, but because you cannot fight the tape, I sold puts 0nly 3 one week out puts for $1.00 for only a total equaling 300 shares. If the GM debacle wasn't hanging over us, I would have put this position on for significantly more contracts.

Sold 10 Puts to Open UBS Nov 10's at .25 bring into my account $250 before commissions just because I think this stock is being oversold because it is a financial and it is a long term play for me. I liked it at 12.5, so I like it even more at 10. If I end up with 10,000 shares of UBS at an average price of 5-10 after this recession, I will be happy with that, but only time will tell if I can buy it that cheap, my only concern is that I hope that they don't own GE bonds.

Sold to Open 3 LLL Nov 60 Puts at .90 bring into my account before commisions $270 I like this company even when Obama come in as the President because
LLL according to what is Posted on Yahoo and is a better explanation than I can give is "L-3 Communications Holdings, Inc., through its subsidiaries, provides command, control, communications, intelligence, surveillance, and reconnaissance (C3ISR) systems; and aircraft modernization and maintenance, and government services primarily in the United States. Its C3ISR" In otherwords, they are the control center for the air force and even if Obama can get troops off the ground, it will just necessitate the need for this company. With a 52 week high of $115 this is another stock that I would only like to get my toes wet and buy more when it cheaper. So we'll first see if I get put this coming Friday.

Sold To Open 10 CB Dec 20th - 30 strike Puts at .50 bringing into my account $500 before commissions. I did this because I do not believe that I am going to be put the current month 40 puts that I have on, so I took in the premium for next moth at an even lower strike, so if I don;t end up owning this fine company at 40 this month, which I believe is true, maybe with all of the GM problems, I can get a chance to buy it at 30 next month. Time will tell.

I have a vote on the blog about posting my day trades - but since it's only been on the site one day and Only one person voted, I'm going to give a summery on my day trades rather then a detail trade by trade blow of what happened, but let me start by saying that I had no Losing Day trades today. And I only traded my Favorite Google front month Puts, not stock trades today.

Bought 85 Google 310 Puts at an Average Price of $7.367 and sold them at 7.80 for a profit, before commissions of $3680.00 So day trading was ok Today. Again, I like the google just out of the money contracts because of the volume, the volatility and the price all make it attractive for me to day trade. Again, I would have held the positions longer until the end of the day and that would have made me an extra $6500 approx, but that would have broken my own rules and that's a slippery slope. If I start breaking my own rules, then the trading becomes a free for all and I will end up losing in the long run, so I made a little less than I could have, but I won't ever lose a ton on a trade sticking to my rules. But you just can't help looking back and saying what if...?

UBS has come into the money at $12.5.

I really feel good about this trade. When I go back and review my notes I see the Swiss Government has helped this Bank out and help clean them up, yet hedge fund unwinds and other selling pressure forces are pushing this stock down, even lower, maybe even lower expected earnings? But look at today's price. I believe it is a steal, I 'm in it for the long haul and if I had have bought the stock instead of selling the puts, I would have paid $17.5 for this stock. If I get put the stock I'll own in at a cost basis of $12ish, much better play than just buying the stock, don't you agree?

I Love Options

Since I want to buy up stocks slowly in this market, I've put on my share of positions for this month, unless I find a position that I can not resist, so look for me to start actively trading positons again on Nov 24th so that I can evaluate what positions I took in this month afer expiration and start selling put for next month. I may make some day trades here and there, but I don't think that you are interested in my day trading as most of my followers like to learn how I trade options the enter and exit positions and learn from that.

However if you really want to see my day trades, sign up for a free newsletter and in the comment box, let me know that you want to see my day trading as well and if I get enough of you that want to watch what I day trade then I will continue to post that. As a matte of fact, I'll put a new poll on the site and listen to my readers in their requests and in the polling.

Thanks,

The Options Trader

WIFE OF A WARRIOR: Personal Loans

WIFE OF A WARRIOR: Personal Loans

Sorry readers, but I didn't do any trading yesterday. I wanted to give a shout out to a fellow blogger and the company that they reviewed. I like both of them but you cannot trade them as they are privately held, But take a look anyway and follow the links. You'll end up at AFS, a good but private company.

Lets Discuss the Market and My Stategies

First of all, I am terrified of this market and that's a good thing. You have to have respect for the market when you invest or YOU WILL lose your money, but at the same time, is it not the best time to buy when everyone is terrified? They say "Buy on Fear" and "Sell on Greed" therefore I should be buying up a storm because I am so afraid.

That's why I am employing the strategy that I am using, which is to sell out of the money puts and wait until expiration day to see what I bought and what premiums I going to keep because I sold the puts, but the stock never made it down that low, therefore leaving me with profit of all of that premium.

As it stands, only a one stock has come down so far to be into the money since I started this blog about two weeks ago. That means that if everything were to remain the same, I will have only bought one stock this month and kept the premium on everything else. But what about that, is that getting into this market too slow? Not in my opinion. IMHO, I believe that stocks are going to be coming down for quite some time and there are deal, but these deals are not going away anywhere in the near future, for one reason and one reason only, that being the first sentence of this dialog, FEAR!

Anyone who is invested in this market is scared shit-less (Excuse the French) that their entire portfolio is going to zero because the financial structure as we know it is going to change and that they are going to lose their life savings. People are afraid of change, (even though they voted for it), I don't think they were voting a particular change, they just wanted Bush out of there so that he couldn't do any more damage) whether it was his fault or not. So as many people struggle with that fear, what do you think that some of them will do, SELL! And while they are selling frantically, I only want to pick up a little stock here and there for the next year or so. Then I'll be in a position to look back and say Whew, made it through that storm without too much damage, and move on to make profits. That is my thinking, I could be wrong, but it just seems obvious to me as a forward thinker.

With that said lets go to Today's trades as it was a wild market. As many of you have noticed by my trading patterns, I try and make money every day and also put on positions to buy stocks cheaper in the future, so today was a wild ride. We'll start with putting on positions in which I hope to buy stock or keep the premium and then we'll list the wild day trades that I did, and I mean they were wile.

Sold 5 PUTs to Open Goldman Sachs Nov 30 strike puts at .30 bring a credit to my account of $150 (before commissions), the stock is currently trading at 75+ after hour while I am writing this, meaning that if I buy this stock it is because it drops more than 50% in the next 11 days, or I just Keep the Premium. I'm just fine with that as I believe that I Will just keep the premium, but if I get put the stock at 30, Id be just as happy.

Sold 10 Puts to Open VZ Nov 25 Strike at .17 bring a credit into my account of $170.00. before commissions. Verizon currently pays a nice dividend, approximately 6% and is a blue chip company, therefore, I do not believe that the stock will fall that low, but with so much selling pressure of everyone with so much fear and the de-leveraging of hedge funds, you never know.

Those were the positions that I put on for long term, but now lets venture into my day trading because Today was a wild one! Those of you that have been following me, know that lately I've been playing Google Options and Ford stock for day trade purposes.

I Started the day by Buy 20,000 F at 1.86, big mistake as that stock just kept on dropping. Therefore I decided to Average Down, So that the Price would not have to move too much for me to break even so, I bought another 50,000 share at $1.75 and a while later bought another 30,000 shares at 1.74. I have been watching this stock and just about every day near the close, the stock runs back up a little so I had to wait, but this is what it looked like:

Bought 100,000 shares Ford at approx $1.77, then sold them near the close at an average of approx... Sold ,100,000 shares Ford at $1.81 making a profit of approx $4000 Before Commissions, so far so good, right? But wait there's more as I got hooked in a google trade.

I was buying and selling puts in Google for a profit all morning long and then it happened, the swing in the market where the Dow went from down 250ish to only down 10 0r 15 point while I was long 20 Google puts. So here is what that trade looked like:

Bought 20 Google 310 Strike Puts at an average price of $11.60 and sold those same puts a an average price of $10.65 Losing $1900 before commissions. OUCH!

During the Morning Session while I was day trading Google option this is what it looked like:

Bought and sold 10 each Google 280 put even at $7.50 Losing Commissions.

Sold 10 Google 310 Puts at $14.70, Bought Back at $14.50 = $200 Profit, less commissions

Bought 20 Google 310 Puts at $13.300 and Sold at $13.60 another $600 Profit - less commissions

Bought 10 Google 310 Puts at $12.90 and Sold at $13.10 for $200 Profit less commissions

Bought 10 Google 310 Put at $11.20 and Sold at $11.50 for a $300 profit less commissions

Sold to open 3 (partial fill) Google 310 puts at $13.85 Ave Price and Bought 3 back at $12.50 for a profit of $405 less commissions

Bought Google 310 Puts at 11.80 and Sold at $11.90 for $100 less commissions

Bought Google 310 Puts at 11.60 and sold the at 11.90 for a $300 profit - less commissions

So my Google day trading profit & losses subtracting my good trades were a total gain of $205. But after commissions, I probably lost a little money, not much - but what a waste of time and that is the way day trading can end up or worse!

Fortunately for me today I was able to get a couple of good position trades done and that Ford trade put some real money in my Pocket.

The Google trading, for all intensive proposes, was a push.

Trades from 11/10/08

Sold 5 Puts to Open, Stock Symbol FLR Strike Price 30. Bringing in $125(before Commissions into my account).While Fluor is an engineering and infrastructure company, I believe that because it, with the rest of the market, has come way off of it highs can benefit from an Obama Presidency of building infrastructure to make work during what I consider the New Obama Dream Deal for Americans laborers. Plus the stock is currently trading at 42+, so either it withdraws another 12+ points in the next 12 days or I keep the money that I brought in as a premium. Either way, I'm happy. I used to own this stock and sold it into the bull market a couple of years back, it was a late player to the table of the last bull market, but since there seems to be a plan to build infrastructure to create jobs, I'm finding that this stock may benefit even during the recession, we'll have to wait an see.

Sold 5 Puts to Open, Stock Symbol "MT" Strike Price 17.5 Bringing in $125 (before Commissions into my account). While this is a steel company, I did this trade for the same reason as the above trade. This stock is currently trading at 24.50, so it has to retreat a long way in the next 12 day for me to be put and own the stock at $17.50, Which I would do, but only time will tell.

Flipped 40,000 shares of F Paid $1.94 sold within a few minutes for $1.95 bringing into my account a gross of $400.00 (less commission). This is a simple day -trade flip for an extra $400 while I'm looking for more stocks that I would like to own and to sell puts against.

Last week I sold 7 puts on CSH with the strike of 30 today I sold another 7 put options on the 25 strike at .55 bringing into my account $385 (Before Commissions), A material Item has changed since I put my original position which I believe may have a material impact on its earnings short term. As I understand it, through legislation, they lost their ability to do payday type loans in some states but they are still going to pawn, which is profitable but not as profitable as the payday loan business (as you can imagine). I still like this stock but I sold the 30 Puts and the stock is trading in the 29.40ish range where there is some technical support down to at approx 28.45, but I still want to own this stock because they are trying to buy the biggest privately owned Pawn Shop chain in Mexico. If that deal happens their earnings should rise and so should their stock accordingly. But my shorter term view has been shaken and therefore I have an order in to sell 7 of the current month 25 strike puts at .25.

"
Fort Worth, Texas (September 29, 2008) - - Cash America International, Inc. (NYSE: CSH) announced today that it has entered into a letter of intent to acquire an 80% ownership interest in a 100 store chain of pawnshops in Mexico.

My thought process is that if the stock goes all the way that low, then it is way oversold and I'd average down my buying price on the stock at 27.5, however, I'm not that convinced that this stock wont rally before expiration day back towards 32.5 -35, leaving me with just option premium in my account and no stock. Whether I get put at 30, and 25 strikes or just at 30 strike, I plan to sell cover calls at the money for the short term and then if the stock doesn't get called away to sell out of the money calls for the next couple of months or until the Mexico deal comes through. As time goes by, and if the Mexico deal gets done, then I won't even sell calls as I'll wait for the earnings to pick up and hold this stock for another year or two during the recession. But we'll have to see if I even get put the 30's or if this was the sell off and the stock heads back up from here. I believe that once the Mexico acquisition is finalized we will finally see the upswing that it's competitor "EZPW" has already seen trading at 14.5 P/E vs. CSH which is currently trading at only 9 times its P/E.

Bought Calls to Open 10 Google 320 Strike @ 12.80 and turned around and offered them out and sold them for $13.00 credit my account $200.00 No position, just a trade that was there. It seems that with all of the trading on google today that it had found a temporary trading range of 310-312, so I took advantage by buying on the bid and selling on the offer one of the highest volume current month option calls that were trading. Turning it right around and selling it for a $200 profit. I'll watch the stock some more and maybe do it again if the opportunity arises. Could have held it with the big sell of in google as it may rebound, but with the market weakness, I didn't feel comfortable holding it any longer than was absolutely necessary to turn a profit. Never let greed overcome good judgement is what I told myself at the time of the trade. I have to dedicate this trade to "Yama Sushi on the Lake" The Best Sushi Bar in Orange County California, as I like Sushi and took my wife there last night. The bill came to $192 with tip and drinks, and I had quite a few drinks. Therefore, this trade is dedicated to them, as it paid for the dinner and I was thinking while eating and drinking that I would do a trade today to pay for it.

Thank You Yama Sushi on the Lake
The reason That I'm thanking them is, if it weren't for dinner last night, I wouldn't have been looking for a quick in and out trade, but because of the quality Sushi that they have, I had to eat there an that forced me to look for the Google trade, so when I saw the stock stall at a new range between $313-$315 I had to make another flip trade and here's how it went:

Sold to open 10 Google 320 Strike calls at 13.70 on the offer and within a minute placed an order to buy it back on the bid at 13.40 putting a $300 Profit in my account. (Before Commissions) So now I didn't just pay for a The Best Japanese Food in Orange County, but I'm up $300 to boot. I wouldn't have even looked for this trade if I didn't feel that I wanted to do a quick flip to pay for dinner, but once I found the trade, I had to stay with it just a little while to see if there would be another opportunity, where the stock moved, but then stalled in another trading range and when that happened, I did it once, more. I probably will not do the trade again today unless while I'm watching it, the stock first makes a move and then stalls again. I'll let you know, but for now, anyone of you that watch my blog real time, and have a computer, the symbol for this particular option and strike is GGDKD. have fun watching and wish me luck!

Had a few Naked Option Orders in But nothing done

When the market is going up, it's hard to find the puts that are a good sale, especially current month as the premiums are starting to drop off at an accelerated pace. I say this because I know that most of you look at my options trades. Had I of gotten filled on the option put orders that I had in, I would have been happy, but like the title of this blog states - Stock and Options Trading, so if I couldn't get any option position trades off, there are no stocks that I want to own at current prices because I believe right down to my core that there will be more sell offs and cheaper prices.

So I did what anyone in my position would do, I found a way to make $600 regardless, just buy day - trading a high volume stock and limiting my risk by being in and out within a couple of minutes on each trade - My trading rules # 167 -Never hold a stock that you don't want to own. I have about 620 rules of trading that I always follow, and I never deviate from them. Some of those rules only apply to certain types of trading, for day trading I have about 18 rules to follow and I used those rules today. That's another reason I keep a diary, to add to my rules when I make an error.

Could I have made more on those trades? Well the answer, in hindsight, ended up being yes, but if it is not a stock that I want to hold medium or long term , then it's not a stock that I want to hold for more than two minutes, maybe three minutes at the most and that's what I did. I always stick to my own set of trading rules that have worked for me for years and I do not stray from those rules, as I never want to be in a position of hoping and wishing. I learned those lessons long ago.

I played it the correct way that I trade and even though I could have made more by holding the stock to the close, that would have went against my rules and in the long run it would hurt me. It's a slippery slope when you allow yourself to NOT FOLLOW your own set of trading rules! As I will never let greed overcome good judgement!

Whether you followed my trades or stayed on the sidelines, I hope you didn't take the opposite side as you will be down on the day and usually I believe that taking the opposite side of my trades is a good recipe to lose money, but you make your own judgement regarding that. Its your money you are trading with, not mine.

Below, Check out my Post on Options Trading "Tips & Tricks"

Same Trade as Below for a Little Less

Bought 20,000 shares F at 1.98 sold two minutes later at 1.99. Crediting my account $200 (before commissions). I can not emphasize enough that I really need a discount broker for this trading. Something like 5 or 10 per trade unlimited shares. I had offered it out at $2.00, but the stock ticked down so I offered it out @1.99 and sold it.

Flipped 20,000 Share of Ford

Bought and Sold 20,000 shares of F (Ford) Paid $1.93 and Sold at $1.95 crediting my account $400.00. (before commissions.) Since it's a little slow in the put market today because it's an up market, although I have some options orders in, none have been filled yet, I decided to watch a stock with tremendous volume so that I can flip it for a profit quickly and that was Ford. While I have no opinion on Ford I am always looking to make money, so why flip Ford instead of a different stock, what makes Ford so special for a quick flip? The way that It there are only two criteria needed to make a day trade

#1 Volume - The stock must have major volume so that you can buy and sell at lightning speed without concern of not being filled. Ford, as I am writing this has had 69+ million shares traded already today.
# 2 Price -Because the price has to be such that if you buy 20,000 shares, that you have the money for it. So I pick ford and waited for the momentum and traded in and out within two-three minutes.

On these type of stocks, if I have the time I'll watch and buy on the bid if I can, in this case the upward momentum was such that I first tried buying on the bid but it was rapidly disappearing so I took the offer and then waited, 2-3 minutes and sold it on the offer.

Now I'm back on the hunt for options

Sign Up Now for Free Options "Tips and Tricks"

Folks,

This Newsletter is made up of the information and chronicles how I made my millions and I'm going to send it to you free. Why? Because I've already made the money and they changed some of the rules because of me. It makes for exciting reading in an otherwise quite boring financial white paper on options trading.

Yes, it is true. The option exchanges actually went to the SEC and ask for rule changes to protect themselves from my trading strategies (at the time I was for looking for mis-priced options). They did not go after me legally, because it was perfectly legal, but they changed the rules so that that I could not use that particular strategy anymore. That hasn't stopped me because I just come up with newer strategies designed for high percentage profits and at the end of the day, they have to trade or they can't make a living and just because I know the game, they cannot disallow me from trading... "It's a thing of beauty to behold".

Once, (and this story is in the newsletter) an Irish guy from Chicago was working on the floor of the CBOE and had my order to execute against a published quote in his hand. The options specialist saw that I caught him with an option that was way undervalued and my floor broker went to buy it, but the specialist trading that option tried to back away from his quote saying that "his computer must be malfunctioning" or something (he was asleep at the wheel and maybe even had a hangover) and I caught him sleeping. When he tried to back out of the trade - this young Irishman didn't like that at all and he , after all he considered himself a tough guy that worked his way up, coming from the streets of Chicago and no-one was going to get one over on him and after-all, what the specialist was trying to do was against the rules. If you post a quote, you must stick by it (especially for a public customers order and only a 10 lot) a 10 lot is options-floorspeak meaning ten contracts. Anyway, to make a long story short it broke out into a bar room brawl, right there on the floor of the CBOE!

The next thing you know I look up at the NYSE News Ticker "Fight Breaks Out on the Floor of the CBOE" it reads! Wow that was my trade. I received a phone call from my broker explaining what had happened and I was asked whether or not I felt that the Irishman should go back in and keep fighting (as there was a break in the action to phone the client). I said "NO! stop the fighting" as we can lose this battle but we'll win the war! And so we did just that, every time I found an over or under valued option, I would slam a 10 lot down his throat for the next three to four weeks, unrelenting in the pressure since he had backed away. He must have gone to the bar everyday after work just to let off steam or to stare at the bottom of his scotch glass wishing this wasn't happening to him.

My point is that trading options is a tough business, sometime literally, but mostly its simple math. The specialists that you are trading against are ruthless and want to win, that is how they make a living and many times it is you against them - so be prepared for battle when you go in and do not let up, as options floor traders are notorious for trying to stick you with a losing trade. It's not for the faint of heart and not for those who will acquiesce to getting a worse price, you need to fight for the price that you really deserve or they may RIP YOU OFF!

I've got current stories and strategies and some from the good old days when options trading was the wild west and the guy who had a computer for a brain with only one eye and I mean that literally, had walked around the floor of the Amex trading and using locked in arbitraging strategies like debit spreads for a credit or A-symmetrical butterfly spreads, still way underused, and he would walk away with millions per year and no-one could figure out what he was doing.

I've got that kind of experience and it is my pleasure to share it with you, so please sign up today for your free newsletter and let me help you to understand the way that I think. I think like a millionaire and it made me a millionaire - Shouldn't you?

If not, don't waste your time or mine because you wont get out of the newsletter what you should, you have to want to make millions to make them - Do you really want to? It really is that simple, do you want to make millions -Yes or No? If yes, get your free newsletter today and if no, you are on the wrong site.

thx...

The Options Trader

Sold Puts to Open

Sold 9 puts, AES Dec 20th 5 strike at .20 bringing into my account $180 (gross before Commission) But why sell puts on energy stocks or energy infrastructure stocks when we all know they are going down? when a stock is cheap it is cheap at that's just a fact and I believe that this stock is too low. Because that is pure short term thinking.

Now that we've seen some of the sell off and we'll probably see more, I'm looking long term. Do you think that electricity will be necessary for developing countries to keep up with their demand in the future when things pick back up? I think so and thus they will need new power plants to produce energy for their constantly growing population that wants the middle class lifestyle and I don't see why the Developing countries shouldn't have what they want, it may be a while, but they will get there, to the promised land. On sale at a never again in this century seen price is Symbol AES IMHO, but many of hedge funds still have redemption's to do and this stock may go lower.

I'm going to try and buy 900 shares of AES by selling the DEC 5 strike as the stock may get down there by then. This sell off is going to last a while and I don't want to be put too many stocks too soon, or I'll have to wait too long to recover my money, but given the 52 week high of $23+ and an all time of $68+ with an all time low of $3ish, I think that I'm getting in at the right price. This stock someday will go back up the $50-$100 and when it does I want to be in it.

Sold 3 puts, NYX Dec 20th 15 strike at .37 bringing into my account $111 (gross before Commission) I figured that the New York Stock Exchange isn't going to perish between now and Christmas and therefore a price of $15 for this stock is extremely cheap, but I don't want too many shares of it because its just too hard for me to figure out the fundamentals to the T. Think about it, where does the revenue come from. If it's from trading, well there has been a lot of that, if it's from the value of the seats, I'm sure that they are dropping, but at the end of the day, this it's basically a play on America and Europe getting together to make sure the financial systems do not collapse, if so, this will be a no brainer trade and I'll just keep the premium.

I don't necessarily want the stock on this one because I do believe that the physical markets will eventually perish, but not this year. Thus, I'm just hoping to keep the money on this play. If I get put the stock, I'll either sell covered calls against or just sell it out, but it's not a long term hold for me, more of a high premium play.

Sold 10 puts, EPIQ Nov 22nd 12.5 strike at .25 bringing into my account $250 (gross before Commission) I want to own this stock for the next 3-5 years or less because the more bankruptcies pick up, the more money this company makes. Talk about ruthless, wow! Sometimes you have to be to make a profit and this company is like sharks just swarming around this weak economy, looking to make money on those in corporations that are in trouble and its working. Still with all of the selling in the market place, I'd rather just try and buy this stock about $1.75 cheaper than its current price on a cost adjusted basis including the premium I took in. If I don't get to buy the stock this month, I'll try again next month.

Like I said, this selling is going to go on for a long time and we are just coming into the storm, not on the way out of it.

This sell off may take a while

We've had some unbelievable up days considering the financial mess that the world is in, so I'm going to let the bears win for a while maybe another day or two before putting on more trades.

I like selling puts into a declining market so that when I do get put stocks it's at a chap er price, but only after a good few days of selling. I need to let the sellers get rid of their stock, but then I'll be right back in selling puts some more and in the meantime I'll be researching good blue chips type stocks, with positive cash flow, growth and maybe a dividend here and there!

It going to be interesting to see what happens at the close, if the selling pressure continues and escalates , well then we're probably looking at another day of down . Which is ok because everytime some gets rid of or unwinds their long positions, it leaves room for more buyers at lower prices and more sellers of puts at higher premiums, like me, that makes me a happy camper.

Sold to open 3 puts, TTM Apr 18th '09 5 strike at $1.10 bringing in to my account $330 ( gross before commissions). This Stock I believe and IMHO bottomed at 3.80 is and I missed it, so I figured long term that since we are in a bear market and it may be a while before we bottom that stocks will get cheaper again and there will be sell offs, especially in Automotive, whose history is that it is not a very profitable business. They are paying a 6% dividend unless they suspend it or stop it altogether. I believe given the time, TTM, the quality auto manufacturer in India will supply India its autos for years to come. Therefore, I'm looking to be put this stock at a cost basis of 3.90 when you adjust for the premium I took in for selling these put options. It may be years before this company really grows into a strong blue chip company in India, but I believe they will and once this stock starts to really move up, I think that this is a once in a century time to buy so cheap. Maybe I should just buy the stock, but since I think that the recession will last a while, I think that this stock will probably come down, so I sold the puts instead of going long the stock. It may be years before this stocks trades at 10,20,30 or even 100 US dollars per share, but when it does, I'm hoping to be in there with it at a cost of $3.90 and if I'm put the stock, I hope that they don't stop paying a dividend. This way I'm waiting for growth and getting paid to wait, but if the stock has truly bottomed and only goes up from here, I'll have to say good buy to all of those long term goals and just say hello to the free $330 I brought in today.

Although there is never a free lunch, there is both risk and commissions associated with the trade. Of all my trades from a 1-10 scale, I give this one a 6 short term but a 10 long term and that's the way I roll, try and bring in premium now, but keep an eye on the horizon for long term growth. TTM IMO either folds, which I do not believe that India will let happen, now that governments are getting into businesses that effect their economy, so even if the Country of India buys some stock to keep this Manufacturer afloat, I believe that it will eventually gain its own footing some day and be almost the exclusive supplier for India auto needs and when India really industrializes, TTM will sell a lot of autos. Not that India isn't industrialised now, but so much of it is from outsourcing from countries like ours, but eventually India will have its own market for it own products and has shown that it can compete well.

I guess at the end of the day, my thinking is that this is going to be a long term hold and eventually it will make loads of money, but it's not going to be very soon, but then again, the stock may not get that much cheaper either. I believe the recession is already priced into this stock, it may have bottomed, time only will tell.

Regardless I figure this is a hold until 2015 or longer if it continues to grow from there. I mean why pay taxes if you don't have to. If I'm put this stock down here at theses prices, I'll probably leave it to my kids or charity and never sell it, unless I lose all of my money in the market in the meantime and need the cash. I don't think that is going to happen though!



Sold to open 10 puts, UBS Nov 22nd 12.5 strike at $.20 bringing in to my account $200 ( gross before commissions). This trade was made because UBS now has a clean balance sheet and has actually shown a profit. The swiss Government bought their bad assets or let them store it away in a bad asset depository and since then everything has been good. By good I mean that I doubt that this stock will retreat back to 12.5 within the next 18 days. There is just no reason for it, other than a complete sell off. If that happens I would not mind owning this stock at the 12.5 price, so what the heck, I'll take the chance, sold the puts and I'm looking forward to being a buyer of this stock at the 12.5 price tag or just keeping the $200 less discount commissions.

BTW: That is an important factor when I trade and that is to be with a firm that gives me a discount on my commissions. I have traded with many brokerage firms and I have a lot of managed accounts that I do not trade in but are managed by professional money managers, who probably are not as good as me.

But most likely they get better research and I can only think about so much at once that I cannot handle investing all of my money myself. Therefore I set up a trading account that I trade in with a discount broker and that way I can make an extra $100-$200K per year and have a good hobby as well. But commissions play a big roll in how much money I make. The cheaper the commissions the more profit I will have, but I still have to make sure that the company that brokers my account will be there and I'm 99.9% sure that they will not go under.

Options trade Sold to Open - Puts

Sold to open 3 puts, CB Nov 22nd 40 strike at .70 bringing in to my account $210 ( gross before commissions). I've been watching the entire insurance sector waiting to see which stock seems to have weakness and CB has been acting like a rock, so either they have their losses or bad balance sheet assets highly hidden in which case, this trade will lose money if they show up too soon, or they really are in good shape, in which cases I'll probably keep the premium. This trade is not for the faint of heart. There are insurance companies with toxic assets on their books and I'm just betting that CB isn't on of them. Even if CB does have something bad on their books, I hope that they would conceal it until after Nov 22nd.


Sold to open 6 puts, JNJ Nov 22nd 50 strike at .25 bringing in to my account $150 ( gross before commissions). My thoughts are that JNJ is a great blue chip company to own and if there is a sell of after election day, I may end up getting put this stock although It is currently trading at approx $62. So it would need a 18% or so sell of to put me and at that price, $50, I'd like to own this stock. Blue chip, pays a dividend, and I can bring in premium while I wait for it to go on sale. Find me something better than that and I'll take it.

Many of you have probably noticed that I do not take big positions on any individual stocks and my reason for that is I know I will lose on some. I have found that by making little bets across the board on the stocks that I like, my overall reward is greater because those trades that I lose on do not eat up all the profit on the winners, IMO, unless there is the major sell off where everything goes down, but we seem to have had that already and it hurt, so I don't want to get caught in the next one- if there is one ( a big sell off) with big positions in any given equity or it's derivative. Therefore, it's smaller diversified trading for the near future. I cannot let greed overcome good judgement and good judgement is to be very careful in these tumultuous times.

Sold to open 3 puts, ISRG Nov 22nd 120 strike at .60 bringing in to my account $180 ( gross before commissions). How low is low? That's the $180 question for this stock. Sticking with my philosophy to remain diversified and go with leaders in each field, no-one IMO sells a better surgical robot for minimally invasive surgery than ISRG. Earnings are already out and their stock has come down in price from a 52 week high of approx $350 to the last sale today of 183.79. Granted they have a high PE, but their growth is still impressive and how cheap is too cheap. IMHO $120 is too cheap for this dynamically innovative company. Therefore I sold the 120 puts - I really don't know what can go wrong that will knock this stock back down that low, but they seem to have a technical support at $127-$130-ish per share. So, even if they just kept dropping, I have a felling that support would kick in pre 120. I'm just hoping that I haven't missed something during my research. Time will tell. I normally don't trade on technicals and this is not a technical trade, but I do look at them as anyone who trades should use all the tools at their disposal, as it would be irresponsible to do otherwise. But you can do with your money what you want, I like to do my research before pulling the trigger.

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And thanks for reading my blog. I've only been posting my trades for one week and I have already had hundreds of viewers looking at my trades. If you want to be updated without having to come back and visit all of the time, you should add yourself as a follower, on the left hand side. I only have one follower so far, but I do not believe that most people understand what being a follower means in this context. It doesn't mean that you are a sheep and that you trade what I trade or that I am giving you advice, because I am not, it simply means that when I post my trades and explanations, they will automatically be forwarded to your email addresses and you can get an insight into my thoughts and reasons for the trades that I make for myself without having to remember to look at my site each day for the trades that I post. Thus, if you are truly interested at seeing what I post and want it quickly, I suggest that you add yourself as a follower. I cannot guarantee that it will get forwarded to you, but I'm pretty sure after reading Googles explanation of what followers receive, you will get updated emails of my posts.


Now, while we are in a bear market, you're not going to see me put on big trades, but rather a lot of small diversified trades, IMO, spreading out the risk and minimizing the possibility of huge losses. Besides, I have dividend income and other passive retirement income and I'm looking to supplement that income with $100K - $200K+ each year as a supplement to my retirement passive income.

So, if your looking for a get rich quick scheme, you're not going to find it here, but if you'd like to watch how a Millionaire, who's made his money in the stock and options market trades to supplement his retirement income, then you've come to the right place. And it's free, because I need my diary to help me trade better anyway and I do not mind sharing my trading diary with the world. My trading is in small enough quantities, that it can be an open book without fear of someone trying to sabotage my strategies.

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