Hi all. Just stopping by to update you on our advanced options play on GMCR. Remember, we are playing what I call a bias-timed-put-strangle. For those of you who don’t remember…
1) buy PUTS early
2) buy CALLS few weeks later at about 25% principle of your PUTS position.
So, to recap, we already bought the GMCR far out puts which, if you got in at a good price (we nailed it just above 95-97) in “anticipation that the crowd was expecting GMCR to get above 100.” Therefore, critical step #1 was initiated. It was important to place your bet before earnings because after earnings the options pricing changes dramatically. Right now, if you are trading with me your PUTS have doubled or tripled depending on your aggressive entry points. Mines are about triple digits since a few days ago. 😉
Anyway, now with earnings out the way, and GMCR, our Ipicurean coffee stock giving us a weak outlook, we can buy some CALLS now (the genius behind a “timed-strangle”… use news and events to your advantage for entry points! Don’t just blindly buy both the call and put on the same day.) My original target to buy the calls was <80, so, now that we hit that point, I don’t have to think much. I can just buy 25% of the principle invested in my PUTs (why 25%? Because, this is a “biased put-strangle”, meaning we buy MORE puts.). I won’t tell you what I will buy, but the Jan @100 is trading around 4.80 which shows a 30% discount from its last trade. Sweet deal!
So there you have it. Hope yall are banking coin!
Meanwhile, I have to apologize for not blogging on the main site these past few days. Right now my father is in the hopsital so I’ve been sleeping over giving him company. I thought he was going to get out yesterday, but they are keeping him for a few more days. I tell you, it makes you nervous, if you know what I mean. Doctors telling you he’s fine, then the next day they tell you they changed their mind. So, yeah, they don’t give me a bed to sleep on there so I have to sit on a stupid chair… imfrickingpossilbe to sleep on that thing. That hospital pisses me off. Anyway, I’ll try to post intraday if I can, but I come home and don’t wake up until 12:00pm which is like 6pm in New York, and by then I have about 3 angry clients to deal with. Right now, I have the most screwed up schedule sometimes it just makes me laugh.Comments »