This simple adjustment just made my CREE position BULLETPROOF... no risk but 100% upside potential. I think you'll like what Income Method #4 means to you. About three months ago I was trading CREE and ended up taking 11.2% out of it... but what was REALLY cool was getting an email from a fella that had just picked up my book.
He said (get this) "RadioActive Trading CHANGED my LIFE!"
How so? Well, he was able to bulletproof his own CREE position... BEFORE the earnings announcement... and therefore got a great night's sleep.
Knowing that he could benefit from CREE going up... without the limits that a covered call would impose... but at the same time, he could not lose...
Well, it was just a big, big deal to him.
Because I get bulletproof all the time ( I used Income Method#3 yesterday to make my NFLX position bulletproof as well), I guess I forget what an emotional relief it can be.
Imagine no-fear trading... when you start out with very low risk (single digits) by properly using a put option... THEN go to NO risk by using one or more of the Income Methods.
Just checked today... the net trade is UP $6.33 per share, not .91 cents. There's a difference between what I'm GUARANTEED in the absolute, worst-case scenario... and what will eventually happen. Don't worry, I'll keep everyone up to date.
freedomschool 1 year ago
No, Danny. You are not paying attention. My CREE trade is currently UP thousands of dollars. The current value of the stock plus the value current value of the puts... both of which I am long in... is way up from my purchase a few weeks ago.
I did not collect a "lousy 91 dollars". I have GUARANTEED myself 91 dollars profit per contract even if something goes horribly wrong... but I am still long the stock which made a NEW 52 week high again today.
I AM bulletproof but am NOT out of the trade.
freedomschool 1 year ago
one thing you did not mention is that the stock went from 65.00 to almost 80.00 and you only made a lousy 91 dollars. While a buyer at 65.00 has made 1500.00
Did you ever think about that?
dfdannyfeng 1 year ago