By Paul Price
I added a new short PUT position to our Virtual Put Selling Portfolio a few minutes ago. Schlumberger (SLB) was trading at $73.08 at the time of trade inception.
(Note: SELLING a put is a bullish position. It is a way of either keeping the premium for the sale, OR buying the stock at a discount to today's price at a future date.)
I sold one Put contract with a January 18, 2014 expiration date and a strike price of $75. The premium collected was $8.40 per share. Thus, the Virtual Put Selling Portfolio pocketed $840. The trade has a break-even price of $66.60 on the expiration date next January. This means that if Schumberger is trading higher than $66.60, we will earn a profit; if it is at $66.60 we will break even; and if it is lower than $66.60, we will lose money.
Here is what the quote looked like at the time of the trade. (Click on image to enlarge):
Here are all the Market shadows put option trades trades done so far. (Click to enlarge)