Rule number one I have is to only sell naked puts (cash secured puts) on stocks that im ok owning if put the stock.
so today pre-earnings tomorrow sold MSFT this weeks 133 puts at $1.07, premiums are a bit juiced because of earnings tomorrow and stock pulled back a bit as well. level i looked at was 133 area since that is the bottom of the channel (or darvas box for you cool guys) its been trading in since August. making the assumption that the bottom of the channel holds thru earnings report.
If stock goes up on earnings will look to close out for profit.
If stock goes down on earnings i will look to roll the put to a further week best case for a credit. unlikely i will hold this till opex and get put the stock but ok if that happens.
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