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I'm Net Long but NOT common stocks


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#1 cycletimer

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Posted 07 March 2018 - 03:36 PM

As previously explained here: https://firechecklis...-buying-stocks/

 

I covered my only short position almost two hours ago (a short call credit spread on the $SPX) and immediately began selling puts on the following names:

 

$GIS, $JNJ, $KHC, $KMB, $MCD, MRK, $PG, T, $VZ, $WBA, $WMT

 

I targeted consumer staples that have been caught up in this down trend since the beginning of 2018.  They all are dividend payers, all are down for the year (some down in the double digits) and all put premiums were pretty rich considering $VIX.  All puts were sold for the months of May or June and all are out of the money.  

My goal is for ALL of these to expire worthless and I will have kept all of the premium captured.  Whichever ones are "put to me" and exercised, my cost basis will be the strike minus the premium collected.  For instance, I sold the $JNJ May 125 puts for $2.75.  If this stock is put to me my cost basis is $125/share - $2.75 or $122.25 (a bargain!).  If this or any are put to me and exercised my next strategy is to sell at the money calls 2-3 months out.  I'll capture the premium from the covered call and if called away I'll keep the premium plus whatever gain is made. 


Edited by cycletimer, 07 March 2018 - 03:37 PM.


#2 redfoliage2

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Posted 07 March 2018 - 04:00 PM

Today's intra-day reversal shows the market is going higher, not lower.  If it wants to go lower today would be a perfect time to do so.


Edited by redfoliage2, 07 March 2018 - 04:04 PM.


#3 cycletimer

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Posted 07 March 2018 - 04:03 PM

I agree, all these puts I sold are bullish bets.