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Pfizer Inc. Message Board

  • fizrwinnr11 fizrwinnr11 Aug 29, 2012 11:16 AM Flag

    Crazy high return on this new naked put investement in the I'm Loaded #1 account

    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.

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    • 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!

      XQ

      • 1 Reply to xquestor
      • 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!

        XQ

    • 08/29/2012 10:59:26 Sold 50 JCP Jan 18 2014 10.0 Put @ 0.83 4,114.54

    • If you think that is so, certainly you ought to be able to answer clearly the few simple questions I'll have for you at the end.

      From late 2004 through late 2008, I had invested 350K of which 250K went into a diversified stock portfolio and the other 100K went into long Pfizer call spreads. While the call spreads didn't generate a dime in margin availability, the stock DID generate margin availability - 70% of the amount of the stock - or 175K. I decided to avail myself of about 100K of that and write Pfizer naked puts. So with these actual, real-life facts, answer these questions:

      1) What was the cost basis that I had in the diversified stocks?

      2) What was my Pfizer component cost basis before selling the naked puts?

      3) What was my Pfizer component cost basis after selling the naked puts?

      4) What was the cost basis of the entirety of my holdings before selling the naked puts?

      5) What was the cost basis of the entirety of my holdings after selling the naked puts?

    • 2/3 of my overall portfolio at the time consisted of non-Pfizer STOCK and that stock provided margin availability for writing naked puts. The system fully allows that kind of leverage.

      The cost basis for the entire portfolio which is what YOU keep focusing on cannot be any more than the money originally invested until more money is added.

      I added NO additional money through 6/2/08 and therefore my cost basis was never any more than the original amounts I had in there. I'm 100% right on this issue and will never repudiate anything when I'm right.

      Using up margin availability to write naked puts adds to the risk and to the leverage but it does NOT add to the cost basis. That is fundamental. If you don't understand that, you don't understand how leverage works.

      I never denied that I was using a lot of leverage. But I'll deny until my dying day that using leverage ever added to the cost basis.

    • Try my special recipe. It has an Italian touch. LOL

    • 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.

    • Here is an excerpt from your post:


      You can't use Pfe naked puts to increase the return on a denominator of 100K of Leaps when you need other stock in the account to provide the margin. Talk about basic!



      With that comment, you stamp yourself as a HYPOCRITE of the first order. It is YOU all along who has been talking about returns on the entire portfolio.

      If a person deposits 350K in cash, buys 250K of stock with it and uses the other 100K to buy long call spreads and then uses up 100K of the 175K in margin availability allowed from the stock ownership to sell naked puts, are you going to try and tell me and this board that suddently the cost basis for my portfolio has gone up from 350K to 450K?

      Obviously if I buy 250K in stock and then use the margin availability to write naked puts on other assets, the cost basis for the stock has to remain at 250K.

      And if the cost basis of the entire portfolio remains at 350K after writing the naked puts and the cost basis of the stock is still 250K, by simple subtraction what doesn that mean that the cost basis of the Pfizer component must be? ANSWER THE QUESTION - and without going off on a tangent.

    • You are intellectually dishonest to the nth degree. I couldn't be more serious. I know you get my point, but you're so tied into your false calculations that you can't admit that you're wrong.

      You can't use Pfe naked puts to increase the return on a denominator of 100K of Leaps when you need other stock in the account to provide the margin. Talk about basic!

      Nobody seems to care about this any more than they do about any of your trades or bogus calculations.

    • 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.

    • You don't have a clue. You can leverage up all you want within the confines of the assets in the account. What you can't do is then use a denominator that ignores the added assets used for margin. You have to compute the return on the account. You never did that. What you did would be laughed at by any investment professional.

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PFE
30.45+0.01(+0.03%)Nov 21 4:02 PMEST

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