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Gold/Mining/Energy : Big Dog's Boom Boom Room

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From: ChanceIs	3/21/2011 11:35:56 AM
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That NFLX is such a wild ride. You can trade that puppy, oh my yes. I love it because it has weekly expiries. I have been holding distant ITM puts and selling the closer puts with near market strikes. I have the April $230 puts currently at $19.75. Against that I sold the March 25 (this Friday) $215 puts, currently at $4.55 with the underlying at $214.92. I keep rolling the shorted puts out every week, this last Friday for $2.60. Not bad - 10% for the week. I look forward to an additional 10% for each of the next four weeks until April expiry. Taleb warns against option sellers. In my case I have made a lot of my principle back for the initial April put purchase, and I am LT bearish on NFLX. At least down to $175. Today's rise gives me an opportunity to roll the $215s down to $210s, but I am staying put (pun intended) for a while longer. That time premium just melts away. Its close on $5 right now. I will take $100 per day on each spread for each of the next five days until March 26th expiry. (Note: The time premium is not linear, decaying for slowly today and much faster on Friday - maybe $50 today and $150 on Friday.) AAPL is another good one to play this way with the weekly expiry.

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