Just picked up a new RPM for the Plain Vanilla paper trading Portfolio! During this afternoon’s webinar we saw a Ross Stores trade pop up on the patented SmartSearchXL tools on PowerOptions. Mike Chupka tweaked one or two settings in our default RadioActive Search, and we had a couple of opportunities for ROST, Ross Stores, and I felt good about this one:
ROST | Ross Stores Inc. | Buy to Open | 400 | @ | $38.33 |
REQWT | ROST Nov 2009 42.5 PUT | Buy to Open | 4 | @ | $6.60 |
Bought shares of ROST | $38.33 | |
BTO Nov 09 42.5 Put | +$6.60 | |
Total Investment | $44.93 | |
Guaranteed Return | -$42.50 | |
Total amount AT RISK | $2.43 | or 5.4% |
Since this RPM only risks $2.43 per share, I could pick up 400 shares with 4 NOV 42.5 Puts so my total risk on a $100,000 portfolio is less than 1%. Remember, the Plain Vanilla Portfolio is a paper trading portfolio where I am only using Income Method #1…I am not actually using my own money to enter this trade? Why? Because if I am opening a RPM for the Fission account I want to use ALL 9 INCOME METHODS discussed in The Blueprint to lower my risk, Bulletproof the position and potentially earn profit, never risking more than 5.4% on the entire position.
But hey, I wanna share for free with everyone how simply limiting your risk to single digits and only using Income Method #1 is still a good idea for volatile markets. Watch this one with me and look for future updates!