Our one-time offer of a free glimpse into OTP’s monthly selections has now expired. With May’s recommendations having been very successful, a bit more than 100 new subscribers joined the OTP Newsletter. We may, in future months offer a single recommendation as part of a free offer, however, that does not provide diversification, which is an important tenet of our strategy.
Subscribers who download our Toolbar get last minute or special situation alerts delivered to their desktop.
|
Stock |
Price at close 5/13/09 |
Recommedation |
Option |
Month |
Strike |
Price |
Type |
Action |
|
Textron (TXT) |
10.53 |
Buy |
Textron |
May |
11 |
0.20 |
Call |
Sell to Open |
|
Freeport McMoran (FCX) |
46.01 |
Buy |
Freeport McMoran |
May |
46 |
1.12 |
Call |
Sell to Open |
|
General Electric (GE) |
12.91 |
Buy |
General Electric |
May |
13 |
0.24 |
Call |
Sell to Open |
|
Dow Chemical (DOW) |
15.58 |
Buy |
Dow Chemical |
May |
16 |
0.30 |
Call |
Sell to Open |
Please remember the important tenets of making these trades successfully.
Don’t be greedy
If the market opens with great volatility, give it a little time to settle. At least 30 minutes.
If prices change significantly from the previous night’s closes, adjust your options strike prices accordingly. For example, if a strike price was $15, but the underlying stock opened significantly lower or higher, choose the strike price that most closely reflects the current stock price. Remember that we choose strike prices that are either very near the stock price or “in the money”.
Purchase your stock first, using “limit” orders. Do not overpay
Next, execute your options trade. Remember Rule #1. Do not be greedy. In order to make certain that you are able to sell the options in what may be a thin market, offer to sell your call options at the current bid price, not the ask price.
Now follow the same procedures for each of the other recommendations. It is very important to diversify your positions, to have a greater chance of withstanding a sour outcome on a single position.
If your option is not exercised, then sell your shares on Monday, paying attention to Rules #1 and #3
Good luck (not a required step, but it always helps)
.
This is a view of what subscribers get on a monthly basis. For May 2009 only, as part of our free offer, non-subscribers got that same view. On occasion, we may provide a sample view of a single position
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