$GMCR OptionsAction trade - Enis

11sep -  been about 6 weeks since airing, no dancing bears, slow motion smiles yet on optionsaction to update.. if you followed into this its worth about 20cents now with stock above 30 for about 80%paper loss.. still few months to opex, though need a good size move down to get back to even. the short puts are going for 5cents so you could close those out and get your buying power/margin back.

---------------------------------------------------------------------------------------------------------------------------------


27july - interesting trade by enis this week, here is the video with some added comments on GMCR by Herb Greenberg.. GMCR clip . desk is very bearish on the stock. Enis has a bearish 1x2 ratio put spread :

Buy the DEC 14 put
Sell two DEC 7 puts for total debit of 1.30

interesting structure .. the few times i actually do this is i try to get the ratio spread for as close to zero as possible.. but enis has a good setup.. as the stock drops towards 7 the profits increase and as it keeps dropping below 7 the profits start trailing off.. obviously can not go below zero. that is the risk on put ratio spreads..that the stock drops way past the bottom leg enough to start getting you a loss since you are short an extra put.. but in this setup , the bottom is zero so like he said in the video clip, the max loss is limited to the amount paid for the ratio spread right now.. downsides as usual are that since you are short an extra put you will have to have margin / buying power to buy the stock at 7 (get put the stock) at opex, and also that since this goes way out to DEC you will have to wait till near DEC opex to realize your max profits unless some event happens like a bankruptcy.

only alternatives for this are to maybe leg into the ratio spread since you have alot of time to opex.. as in buy the 14/7 put spread now and sell the additional 7 Put if the stock drops, ie the 7put increases in value so you take in more premium to help or fully pay off the initial put spread. see all of Enis's on air trades in this google docs spreadsheet

click-->https://twitter.com/Mark_Lexus to follow on twitter