In my weekend research, I hit upon the following naked put plays. Remember that a naked put is a synthetic covered call, so these are bullish moves. (I.e., you sell the put naked, meaning that, worst case, you take assignment of the stock at the strike price at which you sold).
AORI (American Oncology Resources). It bounced off a double bottom of 7 1/16th on Friday. I might even start to be a buyer of the stock at its close of 7 13/16. But for an even more conservative play, sell the April 7 1/2 puts (.QIAPU) (7/16 bid -- 11/16 asked). Worst case, you will have bought the stock at effectively 7, the very bottom of the double bottom. Brings in almost $500 on a 10 contract play.
COMS. Look at the April 22 1/2 puts. (.THQPX) Selling for 13/16 to 1 1/16. Brings in about $750 on 10 contracts and, worst case, you buy the stock for an effective price of 22 1/2 minus 13/16 = 21 3/4.
DELL. But the stock at 40 1/4 and write April 37 1/2 calls. (.DLQDU) The calls pay 4 3/8. Gives you 1 5/8 points when the stock is called away. If the stock drops below the strike, it is like you bought it at 35 7/8.
DELL. Even more conservative, sell the Dell 35 puts (.DLQPG) for 3/4 point. Worst case, you bought the stock for 34 1/4.
AR (Asarco). Pure copper play. Perhaps buy the stock at 15 and write covered calls against it, also at 15. The April 15s (.ARDC) bring in 9/16th. The stock pays dividends too, so you also have to factor in a decent yield.
PAIR. Overly conservative would be to sell the April 7 1/2 puts for 3/16ths (the stock is trading at 9 1/8). Less conservative is to sell the April 10 puts for 1 3/8. On assignment, you've bought the stock at 8 5/8, which has been towards the low side of the stock's trading range.
ORCL. Perhaps sell the April 25 puts (.ORQPE). Brings in 3/4 point. The stock is now trading at 27 9/16. So, on assignment at 25, worst case is you bought ORCL at 24 1/4.
Gary Korn |
