Profitable Option Trading...
Building Wealth Using the Power of Credit Spread Options
A recent Weekly Update emailed and posted to the Members Page:
Weekly Update Posted on the Members Page.
6/8/2008: The 3 filled June Bull Put trades continue to be very safe with only 13 days remaining to expiration. We were able to complete one Iron Condor trade last week when the RUT Bear Call trades was filled. This Iron Condor has a return of 6.4%. Even though the Dow dropped 400 points one day last week the Bull Put trades are still safe with lots of distance remaining. I am researching new trades expiring in July later this week after the market settles down from the bad economic news and record oil and gas prices last week.
I am creating new flash movies this month to illustrate how to select and order credit spread trades using OptionsHouse. These movies will be playable from the members flash movie page. This broker is very popular now and continues to add new features. Their fees are the lowest of all the options brokers and my trades are getting filled quickly when the markets cooperate.
New Trades not Filled Yet
This trade will be replaced this week unless the Dow recovers the 400 points lost last week.
6/1/2008 Trade: (Ordered 6/1/2008) This June DIA 134/132 Bear Call Spread currently has a bid/ask of .05/.10. My limit amount for this order will be .08 cents. The return for this trade is 4.2%. This trade will be filled if the DIA index (DOW) rises next week. This trade also completes the DIA Iron Condor trade if you have the DIA 112/114 Bull Put trade filled. Margin is only required for one side on this Iron Condor trade which has a 8.7% total return.
- Margin Required for each contract of this trade = $200-$8 = $192
- Return - Total Credit / Margin Required = $8 / $192 = 4.2%
- Return for this RUT Iron Condor = $8 + $8 / $200 - $16, or $16/$184 = 8.7%
- We will exit this Bear Call trade if the index rises to 129 which is 3 points away.
- Below is my order placed with OptionsHouse.
June Trades Expiring 6/20/2008
|
Trade Initiated |
Expires |
Index |
Spread Type |
Bull Put Long Strike |
Bull Put Short Strike |
Bear Call Short Strike |
Bear Call Long Strike |
Stop Loss Prices |
Initial Credit |
Margin Required |
Status |
Profit % |
|
June Trades Ordered / Not Filled |
|
|
|
|
|
|
|
|||||
|
Ordered 6/1 |
6/20/2008 |
DIA |
Bear Call |
|
|
132 |
134 |
129 |
$8 |
$192 |
Ordered |
4.2% |
|
June Trades Filled and Open |
|
|
|
|
|
|
|
|||||
|
Ordered 5/18 Filled 5/19 |
6/20/2008 |
RUT |
Bull Put |
630 |
640 |
800 |
810 |
670 and 770 |
$60 |
$940 |
Filled and Open |
6.4% |
|
Ordered 5/18 Filled 5/19 |
6/20/2008 |
NDX |
Bull Put |
1750 |
1775 |
|
|
1815 |
$75 |
$2425 |
Filled and Open |
3.1% |
|
Ordered 5/11 Filled 5/12 |
6/20/2008 |
DIA |
Bull Put |
112 |
114 |
|
|
117 |
$8 |
$192 |
Filled and Open |
4.2% |