Sold Pfizer Puts

I sold the March Pfizer 18 puts for 80 cents.

17 comments:

Anonymous said...

i don't understand the logic of that trade. not a good risk/reward. just my opinion, and i have no view on pfe's stock price.

Tsachy Mishal said...

If the shares are delivered to me I am happy to own them at $17.20, which would be my cost.

If the stock is not delivered I am earning over 4% on my capital in a little over a month.

Anonymous said...

Sold ATHX @ 2.89

OL DAWG

Anonymous said...

LONG JTX @ 2.33

OL DAWG

Tsachy Mishal said...

Ol Dawg aka Mr. Steel,

I joined you in my retirement account. Play money.

Anonymous said...

Tsachy,

Just remember that had JTX not lost the RAL business because PCBC closed down their tax refund anticipation loan business, that JTX would really be trading at less than 4X earnings.

It's totally unclear what happens with these guys. They are all over the place, but there is speculation they loss like 40% of their business because of the RAL.

Personally, i think it's short dawg speculation.

Good luck

Tsachy Mishal said...

I looked at the stock a few months back. Luckily, I did not pull the trigger but at this price its worth a spec and you know these $2 stocks better than anyone else.

Anonymous said...

Yeah I was looking at it since it was at 4 bucks too. That day PCBC decided to sell its RAL business JTX went down 50 cents. From that point on, it went down another 50%.

Tax season is upon us and these guys are in every walmart.

It's high time, the stock should be considered oversold at this point.

Anonymous said...

what if the stock is at $15?

Anonymous said...

i wouldn't be so happy to buy something at $17.20, when the market price is $15.00.

Tsachy Mishal said...

That could happen if you buy the stock as well.

Anonymous said...

selling puts means u have leveraged exposure to the downside, particularly if the stock drops sooner rather than later. it's not the same as just owning stock.

Tsachy Mishal said...

Its not leveraged if you have the cash ready to buy the stock.

It is the same thing as buying the stock and selling a covered call.

I could have achieved the same position by buying Pfizer and writing the March 17 strike call.

Anonymous said...

if pfe goes to $15 in 2 weeks, those puts are worth $3 vs. 80 cents. what are you going to tell your broker?

PJ said...

You guys are acting a little dense. Tsachy expects the market to go sideways in the short term. If that plays out, he's making a good bet. A bounce down gets him into the stock for a subsequent rally; a bounce up lets him buy back his put for a small profit. He only loses with an extended move down, but that's what he's betting against. Gotta take some risk to make money.

Anonymous said...

i'm not acting dense. you sound pretty dense. you're basically saying that he has an opinion on the direction of a stock. duh.

he's selling an insurance policy. insurers go bankrupt if the underwriting is mismanaged.

the CEO of SLM, who knew the company better than anyone, sold puts on the stock. take a look at how that stock did...

PJ said...

I'm not saying I agree with Tsachy's trade, I'm on the short side of the market myself. But he has his style, and he's trading according to it. What's the point of saying over and over again that selling insurance is risky, when he knows that and is intentionally taking that risk?