Mike Scanlin, CEO at Born to Sell (see link below), sent me
a note calling attention to the fact that CBOE is going to begin allowing the sale of “mini-options”
in March. There is plenty of background
on the internets as to how they came up with this strategy, but essentially, it
targets high-priced stocks (over $150/share) and will allow trading on odd lots
of 10 shares.
Mike’s post highlights the fact that there 22 S&P 500 stocks
trading at prices of over $150 per share – AAPL, AMZN, AZO, BIIB, BLK, CF, CMG,
CRM, FLS, GOOG, GWW, IBM, ISRG, MA, NFLX, PCLN, PCP, PSA, RL, SHW, SPG, and
V. However, it looks like only five of
them will have mini options contracts available when this trading starts on
March 18: AAPL, AMZN, GLD, GOOG, and
SPG.
Because my trading plan limits me to choosing stocks rated
as 4 or 5 stars by S&P, of these five, I could add AAPL or SPG to my
portfolio – and I will look into it!
From that broader list, if the contracts were available, I could also
choose BLK, FLS, GWW, IBM, PCP, and PSA.
So there is some promise here for the Rescue My IRA portfolio!
My next step will be to check in with Scottrade to make sure
that mini-options will be offered in my accounts there.
Here is a link to Mike’s Born to Sell blog post on the
topic: https://www.borntosell.com/covered-call-blog/mini-options
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