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  • hotpanera2 hotpanera2 Oct 4, 2011 4:06 PM Flag

    Closeout of BAC Nov. 5-strike naked puts


    Plus, he violated his own methods by not rolling out and down and taking in more money. He took in a very small % of what he paid out, by writing Oct 3s instead. If the rally continues tomorrow as is likely, he will not be able to write anything very good as the VIX will decline and BAC will rise, if only temporarily. And the loss taken was large.

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    • Perhaps he got spooked by a penny drop in 2014 consensus earnings,
      or possibly Kiplinger turned somewhat less positive.

    • With the high VIX and incredibly high near-term premiums available, my strategy with BAC is different than with that of other naked put positions.

      With other stocks I would have put in the same amount of money and rolled three to six months out and down a strike price.

      With BAC though, I can sell very safe options just a few weeks out or a month or two. It's safer doing it this way and in the fullness of time should garner just as much if not more than rolling out a number of months all at once.

      I'm very patient and certainly patient enough that I can make back the losses a little at a time - it doesn't have to be all at once.

    • If the stock rises and time goes by, I'll be making it on my other 1,400 naked puts as well as today's late trade. The premiums are outrageously generous and you certainly know the main reason why. I'll continue garnering my share and it won't take much time to make up for today's loss and the two similar ones taken in early August.

      Remember - I'm a FOT investor and exceptionally patient.

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