Friday, August 17, 2012

Back after a hiatus

I had to take some time off to work on my house and take care of my son.

I noticed that the daily chart for Facebook (FB) showed both a bullish gap and a bullish divergence in the MACD. The implied volatility is also high, meaning that there is a lot of premium available for option sellers.
I sold 2 $19 weekly puts, expiring 8/24.

Here is the chart:

I sold the puts for 0.55 the price range was 0.30 to 0.70.
So my entry score is:
(0.55 - 0.30)/(0.70 - 0.30) = 62%

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