Short post, promise but a few graphs that will take up some space. JPM as example. First graph is a synthetic long selling a 1 week 110 call without the downside protection. Looks like a regular covered call and it should, it is a synthetic covered call (this is what motley fool does a lot of). Second graph uncapped, looks like buying stock but there is no downside protection so would have to have the cash or margin to buy at the put strike. Third graph is a #fuzzy with 5 point disaster protection put. Looks more like a long calendar spread because of the extra cost of the put protection. That is why you would want to sell weekly or monthly calls against it, to lower the cost basis on the debit of the leap spread and the put protection. I personally would probably go 10 points wide but this shows you could do it in a recently funded IRA for 5000 max risk if JPM is not too big to fail.
I am not recommending this trade but I think @smasty160 has a similar trade running.
Hope that helps for people trying to wrap their head around #fuzzies and learn visually, I know I learn better with a visual.
A nice open on the Futures, as ES and YM both open up nicely…a nice trade start for monday…
#Fuzzy Weekly Report
Open Fuzzies (Oldest first)
“Revised Debits” are dropping very slowly due to rollups on hedges.
1. CELG (Mar 110/110/100) Core Debit: 2.38 Net Collected: 1.04 Revised Debit: 1.34 Hedged Jan12
2. RCL (Mar 125/125/115) Core Debit: 3.59 Net collected: 2.36 Revised Debit: 1.23 Hedged Jan12
3. FAS-1 (Apr 70/70/60) Core Debit: 2.08 Net Collected: 1.58 Revised Debit: .50 Hedged Jan12 ITM
4. FAS-2 (Apr 70/70/60) Core Debit: 2.12 Net Collected: 1.57 Revised Debit: .55 Hedged Jan12 ITM
5. LMT-1 (Mar 320/320/310) Core Debit: 6.20 Net Collected: 2.81 Revised Debit: 3.39 Hedged Jan19 ITM
6. LMT-2 (Mar 320/320/310) Core Debit: 6.20 Net Collected: 2.88 Revised Debit: 3.32 Hedged Jan19 ITM
7. QQQ (Apr 158/158/148) Core Debit: 2.73 Net Collected: .96 Revised Debit: 1.77 Hedged Jan19
8. IWM (Mar 151/151/141) Core Debit: 2.25 Net Collected: .57 Revised Debit: 1.68 Hedged Jan12
9. MCD (Mar 170/170/160) Core Debit: 3.12 Net Collected: .79 Revised Debit: 2.33 Hedged Jan19
10. CMCSA (lazy river) (Apr 40/40/35) Core Debit: 1.38 Net Collected: .94 Revised Debit: .44 Hedged Jan 12
11. AAPL (Apr 170/170/160) Core Debit: 5.27 Net Collected: 1.25 Revised Debit: 4.02 Hedged Jan19
12. CVX (Jun 125/125/115) Core Debit: 2.33 Net Collected: .94 Revised Debit: 1.39 Hedged Jan12
13. EXAS (Apr 50/50/45) Core Debit: 6.15 Net Collected: 1.35 Revised Debit: 4.80 Hedged Jan12 ITM
14. MNST (Lazy River) (Jun 60/60/55) Core Debit: 5.13 Net Collected: .50 Revised Debit: 4.63 Hedged Jan12
15. SPY x 4 (4 accts) (Jun 272/272/268) Core Debit: 6.98 Net Collected .58 Revised Debit: 6.40 Hedged Jan17
The total amount of hedges on above, included debit rolls and open hedges is $20,950.00. Almost everything I do is 10-lots.
EXAS: Apr 50/50/45 @ 6.15 x10
EXEL: May 31/31/27 @ 2.55 x10
GWPH: May 135/135/125 @ 9.65 x 5
SPY: Feb 273/273/269 @2.31 x10
LMT: $773 Net