fuzzballl 10:54 am on Tuesday, June 5, 2018
Tags: FallingKnife ( 963 ), IRA ( 431 )

WYNN

#IRA – Not quite a falling knife but getting there…

Sold WYNN DEC 21 2018 140.0 Put @ 4.41
Sold WYNN JAN 18 2019 130.0 Put @ 3.30

Ramie 11:19 am on Tuesday, June 5, 2018

Looks good. Followed for 4.40 and 3.30 respectively. Thanks for the idea!
jsd501 11:43 am on Tuesday, June 5, 2018

I followed at the same price as Ramie
fuzzballl 11:44 am on Tuesday, June 5, 2018

Good luck guys! Watching FSLR for a #FallingKnife also. Wouldn’t mind it a few dollars lower first…
- jsd501 11:48 am on Tuesday, June 5, 2018
  
  Those I don’t like to play with. They don’t make any money.
MikeL 11:51 am on Tuesday, June 5, 2018

WYNN DEC 21 2018 140.0 Put @ 4.41

This is about 5% return per year.
Do you feel it is worth it?
Just trying to understand the strategy.
- fuzzballl 12:00 pm on Tuesday, June 5, 2018
  
  I believe so. 5 percent fairly safely on cash that’s just sitting there. There’s also a chance I’ll be out a month or two earlier too. Also a chance it goes to 50 and I’m in it for years 🙂 .
  
  Like TQQQ posted up above…even though I sold Sep was out in early June. That one returned about 46 percent annualized. Some are high some are low and some are average. Overall a decent return on the entire account for very little maintenance.
- jsd501 12:04 pm on Tuesday, June 5, 2018
  
  At Fidelity I don’t have to put up all of the cash in my trading account. So based on my margin, my return is 17.8% on the December trade of the 140puts.
  - fuzzballl 12:06 pm on Tuesday, June 5, 2018
    
    Is that a non-taxable account?
    - jsd501 12:07 pm on Tuesday, June 5, 2018
      
      no, trading account.
      - fuzzballl 12:09 pm on Tuesday, June 5, 2018
        
        In my portfolio margin account it’s only 760 dollar hit so pretty good return if I did it there (over 100 percent annualized). I did this one in a 401k so it’s full margin.
  - jsd501 12:14 pm on Tuesday, June 5, 2018
    
    Just so MikeL understands. I sold 2 puts on WYNN 140 in December. The net was $877 and the margin requirement was $4,900 so, a return of 17.8% if it expires at zero in December. I will probably put in a bid to cover the short at .05 and buy it back before the expiration.
    Actually the annualized return is even better at 32.2% since there are only 199 days to expiration.
    - fuzzballl 12:16 pm on Tuesday, June 5, 2018
      
      Very nice. Unless something crazy happens I think we’ll be out early.
    - MikeL 12:49 pm on Tuesday, June 5, 2018
      
      Yes, of course, when you use margin, return is much better. I was thinking return on cash secured.
      - fuzzballl 12:53 pm on Tuesday, June 5, 2018
        
        Thought about the spread for buying power purposes. If something better comes along I might by a worthless put to get the margin back. Yep…in this account it’s all cash secured.
- fuzzballl 12:05 pm on Tuesday, June 5, 2018
  
  I could buy the 105 put for 80 cents and boost the return to closer to 20 percent annualized. Fun with numbers!
MamaCash 4:34 pm on Tuesday, June 5, 2018

I let this falling knife fall right out of my portfolio. I had really good profits at one point and didn’t want them all to evaporate. I’d rather get out in some cases than spend months digging myself out of a hole.:-)

Leave a Reply Cancel reply

s: search
c: compose new post
r: reply
e: edit
t: go to top
j: go to the next post or comment
k: go to the previous post or comment
o: toggle comment visibility
esc: cancel edit post or comment