November 9, 2016  Trade Alert -  Rising Tide  Portfolio

These are the initial positions for this new portfolio using the diagonal put spread strategy outlined in the latest Saturday Report.  We had to buy a few calendar spreads rather than lower-strike 21Apr17 100 puts because the maintenance requirement was so great that we could place very few spreads.  IV has fallen since last week as well, so an at-the-money weekly put will sell for closer to $1.20 than the $1.50 which was available a week ago.  Of course, the 21Apr17 puts are less expensive now as well, and the strategy still looks like approximately a $3 price change in either direction will result in a gain for each week.  We had to sell some 103 puts rather than 104s to make the risk profile graph covering a possible stock price move in both directions equally:

 

BTO 2 MA 21Apr17 100 puts (MA170421P100) 

STO 2 MA 18Nov16 105 puts (MA161118P105) for a debit of $2.70 (buying a diagonal)

 

BTO 3 MA 21Apr17 100 puts (MA170421P100) 

STO 3 MA 18Nov16 103 puts (MA161118P103) for a debit of $3.30  (buying a diagonal)

 

BTO 3 MA 21Apr17 105 puts (MA170421P105) 

STO 3 MA 18Nov16 105 puts (MA161118P105) for a debit of $4.55  (buying a calendar)  

 

Be prepared to change these price limits by $.05 or more in order to get an execution.

 
Happy trading.

 

Terry