Before We Move Forward...

Let me add some credibility to my blog. Let's assume I am a newcomer to online commodity trading. I only have $5000.00 to play with. The trade will be in my favorite, the S&P 500 index. Now I only have $5K to work with but I need to build this up because I want to do this full time. So I have to start small, not take any chances and NOT get greedy. It's the only extra money I have. Most online commodity brokers require a minimum of $5K to open an account. Finding a brokerage that even LET'S you trade "Naked Options" can be a challenge in itself.



So let's put it  together. I check the numbers and I find a September 900 PUT OPTION I can sell that fits my criteria. What's my criteria? The most I can make while holding as little margin as I can. Not an easy task but a little research goes a long way. Over the coming weeks I will be posting the numbers for this trade so we can see actual proof of how simple and calculating this method is.

Entered Trade

	Price	Cost
Sell -1 (SPU1900P)	0.45	($112.50)

Requirements

Total Cost	($112.50)
Initial Requirement	$811.25
Maintenance Requirement	$649.00
Total Requirements	$811.25
Estimated Commission	$12.99

     
  
Now don't be fooled by the RED!  Red is negative but numbers inside parenthesis are negative to whatever is inside. What that means is I get $112.50 minus the commission added to my account. This leaves  me with a profit of $99.51. Not bad  for an hour's worth of work.

I'll be breaking the actual trade down and what all the numbers mean in the coming days. I will also post margin requirements daily as they change from day to day. There is a deeper strategy to this trade than meets the eye and the closer we get to the expiration date which is September 16th you will better understand the reasoning. See ya in the pits!