was:
Sell the Apr 13 put for about .60
buy the May 13 put for about .90
for total debit of about .30 ($30 for one lot)
closed today at .15 credit for 50% loss
optionsaction spreadsheet here: spreadsheet of trades
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13 apr - on tonights options action show, with the usual big overpromise underdeliver enthusiasm.. the "ooohh, ahhh" tone of melissa lees voice, saying this trade turned time into money, they revisit an ealier mike khouw trade.. my original comments are at bottom. and here is the clip from tonights show LGF segment
Mikes trade of the Apr/May 13 put calender for .30 can now be sold for .40... not exactly a huge winner, even with a 10 lot. At least they had the sense to talk about this trade since one leg expires next friday. i give mike credit for explaining why he is holding this to next friday to collect that .25 time value still left in the april put. so i will revisit this next friday to close it out. here is the blog entry that has the Google Docs spreadsheet of all the Options Action trade i catch on air. Options Action Spreadsheet
on friday will also compare how my alternative trade would have worked out.
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9apr- original post is below
-as of this morning Mikes Apr/May13 put calender is B/A .25/.45 -- so not much change with stock being down 10%.
- my alternative trade was the "put spread collar" if you owned the stock -- put on for zero is now 1.35/1.65
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23mar2012 - mike khouw had the following put calender trade on LGF:
Sell the Apr 13 put for about .60
buy the May 13 put for about .90
for total debit of about .30 ($30 for one lot)
he is making this a directional trade. i like the trade mainly that you only risk the .30 . have to admit i dont know much about the stock outside of the constant cnbc Hunger Games blabber and Mad Men. I have another suggestion if you want to do this for protection, as in you hold the stock and dont want to sell just yet and expect a near term pullback.. a "put spread collar":
Sell the Apr 15call for about .95 credit
Buy the Apr 15put for about 1.45
sell the Apr 13 put for about .50 credit
If you enter as a 3leg trade you may get this filled for zero. do a lot for every 100shares you own
Your max gain is the $2 wide put spread, so $200 for every lot. You can see the put spread is already in-the-money. Looking at the chart you can see all the volume this week thanks to cnbc, with corresponding spike and pullback. Also $13 seems to be some support from prior to the cnbc plugs, $13 being the bottom of our put spread / and our max profit target.
So again, for zero cost you can put on a $200 protection trade while giving you a little more upside up to $15 level. I would put this on if i was long stock and wanted to hold it.
CNBC Options Action Spreadsheet
follow me on twitter @mark_lexus by clicking on the right side of page for more setups and trades
