May 3, 2015 3:33 PM | 1 min read |
CNBC Options Action's Dan Nathan suggested on the show on Friday an options strategy for traders that have a long stock position in
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
27% profit every 20 days?
This is what Nic Chahine averages with his option buys. Not selling covered calls or spreads… BUYING options. Most traders don’t even have a winning percentage of 27% buying options. He has an 83% win rate. Here’s how he does it.
(NYSE: MCD). He explained that call options made approximately two thirds of the options volume on Friday as traders are positioning for a big move that could happen after the company announces a turnaround plan on Monday. Nathan thinks that this is a good opportunity to own the stock and collect some yield. Nathan wants to sell the May 8 weekly 100 calls for $1.10 and he also wants to sell the May 8 weekly 95 put for $0.90. This structure offers a protection of $2 on the downside and if it trades higher the profits are capped at $102. Below $95 he would have to add to his position. Mike Khouw commented that this strategy makes a lot of sense and Carter Worth believes that the stock is going higher.
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