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Strategies & Market Trends : Option Strategies

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To: sm1th who wrote (2344)	4/5/2022 9:39:16 PM
From: robert b furman	Read Replies (1) of 2591

Hi sm1th, I was watching part of the day also. open interest 19.00 calls and puts are 58 and 432 Open interest 20.00 calls and puts are 484 and 513 Open interest 21.00 calls and puts are 1988 and 167 If I was the market maker I'd want the expiration (I always thing the books are balanced by the Wednesday before the week of expiration) to be below 21 (so I wouldn't have to cough up a lot of inventory- (assigned calls) and I'd like the price to be below 21.00 so they expire to 00.00. The biggest open interest on the puts is on the 20.00's. so above $20.00 and the 513 puts go to zero. My bet is we go into expiration above $20.00 and below $21.00. If price goes below $19.00 we get assigned some shares (19.00) puts and the $20 puts get assigned too. Again a lot of inventory goes out. Below 19.00 and the put goes in the money and every penny below $19.00, the $19.00 put's go higher penny for penny. I'll be watching the hourly rsi and be selling some more 19 puts at 1.50 or more (net price of $17.50ish). Sell a few (5 more 19's and then 10 more 18's). The lower keltner is @ $18.58 today and the lower BB is @ $18.42. Our assignment is right there on the 19's. The recent low is $17.51 on 3/08/22 . so if we dip below 19.00 I'll shoot for $1.50 on the 19's and 50 cents on the 18's. That will get us the recent low - a perfect buy. Now earnings come out on 4/19, the week after expiration. I have a rule of thumb on being comfortable when my underlying stock dips below my cost by the annual dividend ($1.00) in this case. So that $17. 51 I'll ride along with just fine, unless they reduce the dividend. They seem to be very against that so far. $1.00 / $17.51 = 5.71% dividend yield, I'm OK on holding my starting position there, with an add to when it goes above 6%yield. Not sure, I'm new to having this position, but good earnings and we should be lucky to get assigned on a dip. $19.00 strike is close to assignment price, so it could happen, but we'll get a $1.00 annual dividend = 5.4% dividend yield. Better than any bond or bank. It is just a starting position so not so bad to make a little low tax rate income. SIX PERCENTERS are hard to find these days! Bob We SEE!! The perfect play is a dip below $20.00 on expiration and good earnings get us over $20.00. Then sell some 18's and 19's on the next dip. They happen regularly ya know. LOL

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