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June 24, 2011
Edited: June 25, 2011
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I am selling the VISA weekly July 1 2011 $67.50 put at .53. Limit order in and also attempting to sell the VISA July 1 2011 65 put at .34.
Update: Transaction completed. Sold one naked put 01JUL 67.50 at .53.
I think this is low risk. Unless the market crashes next week, I don't see how Visa can drop to 67.50 by the end of next week. It is currently 74.24 (2:50pm est). It is important to get the risk I am willing to accept, balanced against the reward I want to earn.
Visa announced today it will update it's financial outlook on July 6. Visa said it's business foundation remains solid and it will continue to be a growth company. It said it will continue to innovate new products and services. The examples given were one-click e-commerce solutions and mobile wallet. As you know, I have been following and studying Visa (V) extensively and have written on Visa on several occasions in prior blogs. This was not a knee-jerk reaction.
Looking at a chart, Visa has support at 70.80. If the market drops dearly next week, Visa will probably hit support at 70.80 and tag there. If the market crashes, it will slice through support to the next low support level at 67.51. This is where I would need to follow the 'roll put' strategy. Visa is already off 10% near high of 81.
With Visa giving a business update on July 6, I would think it is also safe to assume that analysts will not be providing new upgrades or downgrades on Visa next week...however one never knows about those maniupulators.
I already have a game plan if Visa (V) appears to get near my strike price. I really don't want to own Visa at 67.50. I would do a 'roll put' play and close this put and write a new put on Visa further out. That always results in a net credit gain.
