Math Skills

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Can you be bored and make money?

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Cash Out and Cash In

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Time Is Money

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Here come the British

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Bank On It!

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A Little Bit More

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I always keep the premium.

To my beginners out there, when you sell a CALL option you are generating income for your account, you also are lowering your basis. Here is how it goes. If you look at JPM the current price is $113.29. If you sell the July 12, 114 call, the stock will have to go beyond $114 for you to be called away, otherwise the option buyer is not recovering any of their funds at risk. If the stock goes beyond $114 your stock is called away and you are paid the $114 per share you agreed to sell at, regardless of it’s current price. Your maximum profit on this trade if you bought it and sold the call is .71 cents but another 44 cents from the call option, that’s $1.15 per share.  Keep in mind if the stock closes at $13.99 you keep the stock and the premium and get to sell another call. This is how we generate income and lower our basis. 66% of the time, the options expire worthless. Winner Winner. This is the odds are in our favor.

All investing involves risk, so Options Dojo can make no warranties or guarantees regarding our Sensei’s selections.  Invest with an awareness of your skills, experience and risk tolerance.  Options are not suitable for all investors and people can and do lose money.

It’s your fault, no, it’s not

The issue here is the fight in the middle east. Iran threatens the delivery of oil and the U.S is now an exporter of oil. The bottom line here is that the price should stay stable for a while. This is why we are selling the July 12, 41 PUT on BP.  We would like the stock a little lower and this gives us the chance to get in roughly at $40.71.  At that price we will have a 6% dividend that is a very good yield. If we have friction in the middle east we can see a rise in price.

All investing involves risk, so Options Dojo can make no warranties or guarantees regarding our Sensei’s selections.  Invest with an awareness of your skills, experience and risk tolerance.  Options are not suitable for all investors and people can and do lose money.

Out on a wing

Okay, we’ve seen multiple problems with Boeing(BA), we believe the fix is coming and the impact will be reflected in next quarters earnings, however in the long term we see the price rising as delivery of future orders are fulfilled. We are selling the BA July 5, $350 PUTS.  If PUT to us we would be looking at an entry basis of $349.

All investing involves risk, so Options Dojo can make no warranties or guarantees regarding our Sensei’s selections.  Invest with an awareness of your skills, experience and risk tolerance.  Options are not suitable for all investors and people can and do lose money.