Updated stats are as follows
11/17/04 -$100,000 ($27.99) Inception of $100,000 investment
12/31/10 - 066,105 - ($17.51) Year-end 2010 close
01/03 - 071,465 - ($17.68) 2011 Closing low to date
01/07 - 096,500 - ($18.34) RSI 76.0, highest in 53 months
01/21 - 102,880 - ($18.36) Annual LEAPS options expire
01/28 - 096,085 - ($18.15) RSI 53.8, lowest of 2011 to date
02/01 - 130,580 - ($19.22) 2012 earnings reaffirmed; new $5B buyback plan
02/02 - 121,925 - ($18.96) Ex-dividend 20 cents
02/04 - 131,540 - ($19.30) RSI 75.3, decade-long downtrend line shattered
02/11 - 120,055 - ($18.83) RSI 59.3
02/17 - 137,860 - ($19.37) RSI 68.4; 2011 Closing high to date
02/18 - 132,780 - ($19.19) RSI 62.8, Cramer buries pharma stocks
Every point between $17.50 and $25 means at least 55.9K over time.
My ultimate goal is to be able to cash out Pfizer options for a million dollars by Inauguration Day 2013. A $29 stock price would likely enable me to do just that. A $25 stock price would mean a cashout of about 800K and a mere $20 stock price still means a cashout of about 520K net of naked puts.
At least the poster was educated enough to know about that spelling. Did YOU know without doing a Google search?
Do you expect other posters to have to dumb down the board for the likes of you?
> Nobody but bears are going to be handsomely rewarded during once-in-a-lifetime market crashes
You were down prior to the crash.
Your losses doubled while the stock price remained unchanged:
Dec 2005 stock price $20.60 with investment loss of $68,250
Mar 2008 stock price $20.61, with investment loss of $133,095
<<Chartness did take a beating in the market in 2007-08, but so did ninety to ninety five percent of the population>>.
I don't know anybody else who had a major financial asset (as a % of portfolio) go down by 300-400%. You shouldn't let yourself get caught up with the propaganda and convince yourself that what he did was typical. It was WAY out on the fringe compared to what anybody else, especially retirees who are not multimillionaires, were doing. Moreover, it involved constant threats of new margin having to be put up. Yet, it was repeatedly touted to people who didn't appreciate the potential risk. He really doesn't deserve a free pass.
What's worst is that he hasn't learned his lesson and he is still pushing leveraged plays to people who might have only 5K or 10K to invest. That to me is grossly irresponsible. If you disagree, that's fine but that's my very strongly held view and it's completely heartfelt. While some of his conduct towards others is execrable (I also like that word), I can assure you and everybody else that my criticism of his methods is not at all personal. It's completely on the merits of what he is recommending.
why not write a book??
hahahaha goldie, you made a funny...alan couldnt sell a pair of sunglasses and a white cane to blind man....ololll..let alone get off hizzazz and actually publish anything...lol
alan/chty -- if you truly r making big bucks with yer options --why not write a book?? that is the real ticket if your stratagies are winners-- share them with the world not just the pfe board----lololol (rolling eyes again)
Here is an excerpt from your post:
Finally, don't fall for the return calculation based on minimum margin needed. Even he has excess margin available. Anybody writing naked puts needs to have a lot of extra margin available. The return has NOTHING to do with margin. Assume I repeated that ten times. It is the absolute truth. The return simply compares the beginning and end value of the account and annualizes it. Margin requirements, tolerance for risk and many other circumstances will affect the specific investments made to be sure. But it is just wrong to calculate the return based on margin needed for a particular trade.
That is total baloney. Yes - those writing naked puts should have outside reserves - just in case of a horrific market meltdown. But as long as those reserves aren't used and are located elsewhere earning interest or dividends, they are NOT part of the calculation. The money is just there in other investments in case of an emergency. And in the unlikely case they have to be tapped, then and only then would they be factored into the calculation regarding return.
If a person with, say, 100K in total liquid assets wants to invest 20K of it in writing naked puts, then fine - he deposits 20K and tries to get the most bang he can for that dough commensurate with reasonable safety. He doesn't really want to deposit more than that but would if the market really tanks but yet the fundamentals are holding up.
Now at MY brokerage, that kind of investor really CAN get the most bang for his buck. He could for example sell F 7.50-strike naked puts out 11 months for $22 a contract with the stock above $14 and margin requirements are just $98 per contract. So if the stock closes just above $7.50 in 11 months, he'll earn 22% on his money, a handsome return with such slight risk. And don't get the idea that the margin requirement of $98 per contract is overly lenient either as it offers protection all the way down to $6.52 on the stock - with the stock in the 14's? Why should anyone need to have more protection than THAT with the stock so far above that price? There's time enough for more protection later if the stock really tanks. But who worries about needing protection below $6.52 on a stock in the 14's that hasn't even been below $10 in a year-and-a-half? No it isn't that my brokerage is so lenient - it's that the others are so ridiculously HIGH. With a minimum of $500 per contract at some houses, they would be requiring protection all the way down to $2.50 for F with the stock selling over $14. And while the stock did get that low during the once-in-a-lifetime crash, no way that options players have to have that kind of margin requirement.
And what a difference if you are taking in $22 in premiums per contract for 11 months whether you have to put up just $98 or whether you have to put up $500. If you have to put up $550, the return is a mere 4.4% - hardly worth the effort. But with a TWENTY-TWO percent return, now THAT is a horse of a different color.
Don't tell this board that margin requirements don't matter. When it comes to naked put selling, it's virtually EVERYTHING. It's the difference in my case between a 4.4% return and a 22% return.