CLOSING the $AVP Option Action Trade -mike 5/9/2012

20 july - like i said below..have to make a decision... with stock at 15ish now..i like the selling strangles strategy if you already are long and are ok in adding to it..so you would have to decide what to do here since surfing goats takes priority over revisiting losing trades.. selling the strangle for this name resulted in the calls of course going out worthless (max profit) but the puts now are at $3.70 . so to get out of this position you would essentially have to pay $3.70 to exit .. on a $2.05 credit entry.. will close the puts at 3.70 in the spreadsheet..chaulk up another loser. do you even know anyone that is in Avon? i dont

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17july - going to have to make a decision soon on this one if you followed mike in..see my original write up at bottom, with stock at 16.93 it could go either way of profit or loss this week..depends on if you want more shares. some of those "constant trade updates" sure would be helpful to the viewers right about now.

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29jun - if you followed mike into this as well its looking like you are going to be "put" some stock with stock at 15ish unless you take some action. mikes on-air trades in a google docs spreadsheet

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9may - Good strategy tonight by mike, another one of my favorites.. that would be "selling a strangle". here is the video clip AVP clip . with stock near 22

Sell the July 24 call for $1.05
Sell the July 19 put for $1.05
total credit $2.05

mentioned by mike is that he recommends this if you are long the stock. could have emphasized it a bit more along the line of "if you are long the stock and want a way to buy more at a lower price".. kind of danced around it a bit i thought..hence karens question. so this is a covered call with a cash secured put sale essentially, so you will have to set aside buying power to buy 100 shares for as long has you hold that short put, its not a free trade.

the great part about this like mike said is that if stock moves up to 24 or higher..you keep both premiums so you essentially sell at $26.05 . flip side is that if stock drops a below 19 at july opex you will buy another 100 shares per put (be put the stock), but you keep both premiums again so your entry into more stock would be $16.95 . you can always just buy back that Put at anytime prior to opex if you dont want to buy more shares or you the premium has decayed enough to give you a satisfactory profit or you need that buying power elsewhere... you dont have to hold to opex.