EBAY – a new RadioActive Profit Machine

Hey Traders!

So the newest addition to the Fission’ subscription stable of winners: EBAY.

Back in 2002, I invented a new “Income Method” for trading a married put and used it on EBAY. I don’t know if or when I may be using that particular adjustment again… but EBAY has a special place in my heart.

TODAY, at about 1350 (1:50pm) Eastern Time, I recorded a NEW RadioActive Profit Machine that went like this:

EBAY eBay Inc. Buy to Open 500 @ $31.70
EBAY 2011 OCT 34.00 PUT Buy to Open 5 @ $4.25


Bought shares of EBAY $31.70
BTO Oct 2011 34 Put +$4.25
Total Investment $35.95
Guaranteed Return -$34.00
Total amount AT RISK $1.95 or 5.4%

So now, clear out to October, this setup guarantees me that I can get back all but $1.95 per share of my initial outlay, or 5.4% of the total amount invested.

This is scalable of course… One could pick up 100 shares and one put option, or 300 shares with 3 puts… in the setup above I am showing 500 shares with 5 puts. Either way, the percentages work out to the same: 5.4% of the capital in the trade is AT RISK, no more or less.

Can you imagine trying to trade EBAY with a 5.4% STOP order? I can’t. Haven’t used stop orders in about ten years… so I can actually nap through ‘flash crashes’, opening gaps, disaster news on the telly.

Well, Traders, I don’t know what will become of EBAY over the next few months…

(BTW, in no way should my recording of the trade be construed as a recommendation to buy or sell EBAY or anything else ~ I am simply demonstrating HOW I trade when I do: with a put option in place to keep me out of trouble)

…but I DO know this: EBAY can crash and burn and I will be out of it, probably long before I lose even the full 5.4%. OR..! EBAY can go up and I will be in the green.

There are as many as TEN adjustments that I’ll make to the position, after it makes a move; I may take income, reduce the already small risk, or BOTH with these “Income Method” adjustments. But seeing as I don’t know the future, I can’t tell you just now what those will be.

Care to track EBAY with me?   Thought so. I’m eager to see what happens next.

Happy Trading,


About Kurt Frankenberg

Kurt Frankenberg is an author and speaker about entrepreneurship, martial arts, and trading the stock and options markets. One of several "Biznesses" he founded as a teen, The Freedom School of Martial Arts, has been in continuous operation since 1986. Kurt lives in Colorado Springs with his wife Sabrina, German Shepherd Jovi, and his ninja cat Tabi.