With the stock at $26,05, sold 50 of the 10-strike naked puts out to Jan. 2014 for JCP. Sales price of 483 per contract. Net proceeds after commissions of $4,115 with cash margin requirements being $9,650. Nominal return of 42.6%n for 72.6 weeks if the margin-safe price all the way down to $11.25 holds. The annualized rate is 27.1% if held to expiration but with the almost-certain early out, the actual annualized rate of return should be in the low 30's. How incredible for TEN-strike naked puts with the stock at TWENTY-SIX.
That particular option is selling at around $ 82 to $ 83 per contract; not $ 483 as you stated.
"With the stock at $26,05, sold 50 of the 10-strike naked puts out to Jan. 2014 for JCP. Sales price of 483 per contract."
You are wrong again!
While I am on the subject of selling put options; I see that you are always selling these put option contracts on stocks that have risen in price like JCP or on stocks that are well off their lows.
PUT options should only be sold on stocks that have pulled back in price, hit a bottom, have become very undervalued, have a sound business and the theoretical value of the options is much less then the trade price for the options being sold.
It is very clear that you do not know what you are doing!
I'm truly the Real McCoy and I have millionaires and multi-millionaires beating a path to my door. These are truly the salad days for me.
hey mccoy,if they think that you're gonna make them money,tell them they need reservations like you for years to come,OR,strike 3 and they're out,LMAO.
I always include returns on the entire portfolio - I call it "combined portfolios updeate." Whereas I now no longer have the stock that I had through most of 2008, I DO have CASH sitting there as reserves which is even BETTER collateral than stock. Because I always have the necessary collateral to sell naked puts - whether it's stock or cash - the denominator does NOT change unless I add more money.
If I have requisite margin availability in the account, selling naked puts doesn't increase the cost basis or denominator by one iota. How many times do I have to keep saying that before you finally get it?
Stop the nonsense about "obfuscating" - the system allows me to take advantage of margin availability and when I do use some of that availability, it simply adds to the risk and the leverage but it doesn't add one penny to the cost basis.
Your betters for over a decade have shown you how easy it is to buy near the bottom & sell near the top.
That's why we traders have whipped your lardar$e year after year. How many investors do you actually know?
Everyone on this board has beaten you for the year, the decade, the century & ever since your mom whelped you onto your head, pathetic loser.
You won't get to first base in touting anything until you unequivocally repudiate your ridiculous claim that the original basis in Maniacal Methods was 100K. Under no rational standard of honesty or propriety can one put 100K into Leaps, write naked puts using ADDITIONAL cash in the account to meet the required margin and compute returns on a base of 100K.
There are numerous other problems with your calculations that have been documented here repeatedly. But the above is so blatant that nothing matters until your phony claim is repudiated.
<<It is YOU all along who has been talking about returns on the entire portfolio>>.
Of course. Have you computed the return on the entire account, including the stock needed to margin the Pfe naked puts? Of course not.
Stop obfuscating. You're dead wrong and you're not getting away with it.
Your denominator for the calculations of Maniacal Methods 100K portfolio has always been 100K (putting aside funds added much later). It SHOULD be the entire account, including the assets needed to margin the naked puts.