Downgraded

Amgen is weak on a downgrade. I have used the weakness to sell out of the money naked puts.

3 comments:

Dr. Dre said...

Love out of money put writing.. I do it a lot but get very cautious when we are not in a clear bull market....

Doing on downgrades is clever - never done it actually!

But buyer beware -- think about where the market is -- sometimes major macro forces can pull down everything more than expected. (ie if you think the market is neutral to up, the put writing is clever; if u think the market may go down further - you may end up owning amgen at an unattractive price or taking a loss on the option).... I personally am neutral on the market until deep into the 4Q... the outlook is too murky for me to put on major risk now.... but thats just me.

good luck

Tsachy Mishal said...

The key is not to write more than one is willing to own at that price.

Tsachy Mishal said...

The way I see it is I would buy it at that price so why not sell the premium and make some money if it doesnt get there.