My last option trade was a success. On Friday, June 14th, I STC the $35 August 17 2013 Calls I purchased 8 days before. My plan was to sell at a specific price after the underlying stock, BGS, reached above $32. Even though it had breached $32 the day prior, it didn't hit my price until the 14th. The result of the trade was nearly a 200% profit after commission. As of this post BGS is still going up and the option value is going up as well. But as the expression goes, "No one ever got hurt taking a profit."
I believe that BGS may continue to go up for another dollar, but I believe I got out at a good price. I am expecting that BGS will come back down to about $28.75-$29.25. I want to then BTO stock or attempt to trade options on it once again. I haven't yet decided. That's my opinion. What's yours?
Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
BGS - B&G Foods Inc.
BTO - buy-to-open / bought-to-open
STC - sell-to-close / sold-to-close
Monday, June 17, 2013
Sunday, June 9, 2013
Portfolio Update: Option Pick
Today I am posting about my latest transaction. This transaction is a bullish option trade on BGS. The options I BTO are the $35 August 17, 2013 Calls. Normally, one would want to buy the options ITM to take advantage of the immediate leverage. Unfortunately, I am playing with a minimal amount of free cash so OTM Calls were my only choice.
The trade processed as the second half of a contingency trade. When BGS traded above $29, I bought the options at $0.10 per contract share ($10/option) . I chose the $35 strike because my target for BGS within the next couple months is about $32. And the available intervals for the August Calls are $2.50 apart.
My plan is that when it breaks $32 I am taking the money and walking. I think this is likely. I probaly should have set my purchas for $0.05 per contract share as the following day that was the last purchase price, putting me behind already. I still thik profit is possible. That's my opinion. What's yours? Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
BGS - B&G Foods Inc.
BTO - buy-to-open / bought-to-open
ITM - in-the-money
OTM - out-the-money
The trade processed as the second half of a contingency trade. When BGS traded above $29, I bought the options at $0.10 per contract share ($10/option) . I chose the $35 strike because my target for BGS within the next couple months is about $32. And the available intervals for the August Calls are $2.50 apart.
My plan is that when it breaks $32 I am taking the money and walking. I think this is likely. I probaly should have set my purchas for $0.05 per contract share as the following day that was the last purchase price, putting me behind already. I still thik profit is possible. That's my opinion. What's yours? Disclaimer: See bottom of page. http://investorsopinion.blogspot.com
BGS - B&G Foods Inc.
BTO - buy-to-open / bought-to-open
ITM - in-the-money
OTM - out-the-money
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