This is an example of a No Brainer Trade. If I was to have sold today, I could have netted 33% since Friday or made $2,000 on the 10 contracts I purchased on Friday.

When I get some time, I will show you how to do this on a regular basis and I will show you how truly easy it is to do with the right information and why options in many cases are FAR LESS risky than purchasing stocks. And NO I am not going to sell these yet.

Nothing fundamentally has changed since I posted this trade on Friday. When playing with Options, you make a plan and stick with it. Keep your eye on the bullseye. Trades like these are why I just laugh at the experts that tell you that you have to have a diversified portfolio and yet never mention using options in your portfolio.

Personally in my mind if they do not mention them they are charlatans. If they do not mention them, their advice most of the time is rubbish for sure.

Normally I would have probably purchased 30 contracts and sold the Puts Short on top of that. If so I would be up I think $60,000 today on the trade and no I would not be selling yet….Hmmm.. have to go look at the Puts and see where they ended. Anyway, that is not for everyone of whereas all of you are capable of purchasing Calls.

I will also show why if you own individual stocks you should consider selling Covered Calls on them.  I just looked at what the CBOE has as far as an explanation for what a Covered Call is  and honestly it sucks.   I will throw together a short video on what they are soon.

Sometimes you just need to put some eggs in one basket and watch it carefully and then know when to run with it and take them out. But these chicks are not ready to hatch yet no matter how fast they are growing. Let us be patient and see just how big they get. I think you will be surprised.

To find out what a Call, Put, and Options are Click Here to go the the Chicago Board Options Exchange. They have some great training and information and a Virtual Account that allows you to play with stocks and options. Got to love it! If I can back date the trades I have done I will use it to show you what is going on!

This entry was posted on Monday, March 24th, 2008 at 10:53 pm and is filed under 20 Percent Plus Returns, Options, Play Of The Day. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.