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I am paper-trading selling naked puts.
I just sold 10 QQARI, ASND Jun 45 puts for 2 1/8. ON PAPER ONLY.
My reasoning is that I am willing to buy ASND at $45. If the option
is executed, I will have 'bought' the stock at $43.
My last paper trade was to sell IOM puts for $1 at the end of May.
They are worth 1/8 now, and I have an open order to buy them back at
1/16.
Real Trading: I have decided to put off buying ASND until tomorrow.
While it is near my target, it is falling too fast. (Go ahead, call
me chicken!)
On Thu, 05 Jun 1997 17:43:36 GMT, I wrote:
>Well, ASND is down again today. But I think the bottom is near.
>Right now, at 46 5/8, it is just below the 50-day MA.
>
>Now I want to engage in an admittedly dangerous exercise: I am going
>to predict the bottom of a channel we have not yet seen.
>
>Take the top of the new channel to be the line from the highs of 5/5
>and 5/28 (i.e. 53 1/2 and 60). These are 16 days apart, with a ratio
>of 1.1215. I want to draw the bottom of the channel through the low
>of 4/22 at 36 1/8, and with the same slope as the resistance line
>above.
>
>This line will go through 5/14 at 40.514 (4/22 + 16 days, and 36 1/8 *
>1.1215). That same line will go through 6/5 (today, another 16 days)
>at 45.436.
>
>That is my target price, *if* ASND reaches its low today, or perhaps
>tomorrow at 45 3/4.
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