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#30591 Oct 26, 2015

CMI

STO (Nov 6 weekly) 105NP@ .55 (12 days)

90.6% chance stock will remain above strike

6.7% OTM

D= -.09

Stock at 112.55 -.29

Recent low was 105.40 which appears support

Good earnings

Don

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#30624 Oct 27, 2015

How did u pick that $105 strike? I am planning to look at it today....$107 pre-market. Amy -----Original Message-----

From: D Malman dmalman@... [CoveredCalls-NakedPut

To: CoveredCalls-NakedPuts

Sent: Mon, Oct 26, 2015 1:21 pm

Subject: [CoveredCalls-NakedPut

CMISTO (Nov 6 weekly) 105NP@ .55 (12 days)90.6% chance stock will remain above strike6.7% OTMD= -.09Stock at 112.55 -.29Recent low was 105.40 which appears supportGood earnings

Don

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#30627 Oct 27, 2015

CMI is down to 105 pre market. But less than 1000 shares.

Bob N.Southern Yankeebavage1@...

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#30636 Oct 27, 2015

Hi Teddi,

Just read the Greeks vs Volume and I had a question. Whenlooking at support levels from 3-5 years ago, why should we assume that the sharesbought back then to create this volume haven.t been already sold off, so ineffect, the support vanishes because there is no longer stock there to supportit.

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#30847 Nov 6, 2015

CMI

STO (Nov 13 weekly) 102NP@ .50 ( 8 days)

83.9% chance stock will remain above the strike

3.8% OTM

D= -.16

Stock at 106.05 -.45

Don

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#31715 Dec 22, 2015

CMIBTO (Jan 15) 90/91 Bear Call Spread @ .35Sold $90 callBought $91 callThat creates a profit of $35 against $100 of risk.Stock at $85.39 + $2.88

Corey

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#31777 Dec 28, 2015

CMI

STO Jan 93/98 BCCS at a diff. of .46 (Rec .56 for .93 and paid .10 for 98) 19 days

75.9% chance Stock will remain below the strike of 93

4.1% OTM

D= .25

Stock at 89.33 +.03

Don

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#31778 Dec 28, 2015

Don

Apologize for the ignorance.

What is BCCS? I see it as a call credit spread. Is it Bear Call Credit Spread by any chance?

regardssada

On Monday, December 28, 2015 12:55 PM, "D Malman dmalman@... [CoveredCalls-NakedPut

CMI

STO Jan 93/98 BCCS at a diff. of .46 (Rec .56 for .93 and paid .10 for 98) 19 days

75.9% chance Stock will remain below the strike of 93

4.1% OTM

D= .25

Stock at 89.33 +.03

Don

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#31779 Dec 28, 2015

Yes, it is a Bear Call Credit Spread. The premise is you don't want the calls to go up.

Don

From: "sadasivan s ssada_sivan@... [CoveredCalls-NakedPut

Don

Apologize for the ignorance.

What is BCCS? I see it as a call credit spread. Is it Bear Call Credit Spread by any chance?

regardssada

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#32490 Feb 9, 2016

CMI

STO (Feb 12 weekly) 95NP@ .40 (4 days)

92.3% chance stock will remain above the strike price at expiry

4.8% OTM

D= -.07

Stock at 99.17 +.74

Don

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#34423 May 25, 2016

CMI

STO June 104NP@ .60 (24 days)

88.1% chance stock will remain above the strike at expiry

7.5% OTM

D= -.11

Stock 112.83 +3.12

Don

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#34424 May 25, 2016

There is a simple way to know the Probability of an out-of-the-money becoming in the Money.

Actually, you don't need an extra calculator to know it.

The Delta of the strike price is an approximation of the Probability of the OOM strike becoming In-The-Money. So, the probability of the OOM strike price remaining expiring worthless is (1 - Delta). Take absolute value of Delta.

In this case, the Delta is -0.11, so the probability is aprox. (1 - 0.11) = 89% the stock will remain above the strike price.

If you want a better probability of expiring worthless, then select anything which has a Delta of 0.1 or less (absolute Value). Then you have a better than 90% chance of getting the stock expiring worthless.

An ATM Call or Put has a Delta of 0.5, so there is a 50% chance of becoming in-the-money, or Out-of-money upon expiring date.

Just something to simply the strike selection by knowing the approximation of the probability, assuming everything else is equal.

From: "D Malman dmalman@... [CoveredCalls-NakedPut

CMI

STO June 104NP@ .60 (24 days)

88.1% chance stock will remain above the strike at expiry

7.5% OTM

D= -.11

Stock 112.83 +3.12

Don

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#34425 May 25, 2016

Thank you for your comments. This is good information for those that are unfamiliar with how Delta works. I use the Power Options site for my information. They have a proprietary way of showing their results. The figures are close.I always check the Delta and try to get as low a Delta as possible.

Don

From: "c.kung@... [CoveredCalls-NakedPut

There is a simple way to know the Probability of an out-of-the-money becoming in the Money.

Actually, you don't need an extra calculator to know it.

The Delta of the strike price is an approximation of the Probability of the OOM strike becoming In-The-Money. So, the probability of the OOM strike price remaining expiring worthless is (1 - Delta). Take absolute value of Delta.

In this case, the Delta is -0.11, so the probability is aprox. (1 - 0.11) = 89% the stock will remain above the strike price.

If you want a better probability of expiring worthless, then select anything which has a Delta of 0.1 or less (absolute Value). Then you have a better than 90% chance of getting the stock expiring worthless.

An ATM Call or Put has a Delta of 0.5, so there is a 50% chance of becoming in-the-money, or Out-of-money upon expiring date.

Just something to simply the strike selection by knowing the approximation of the probability, assuming everything else is equal.

From: "D Malman dmalman@... [CoveredCalls-NakedPut

CMI STO June 104NP@ .60 (24 days) 88.1% chance stock will remain above the strike at expiry 7.5% OTM D= -.11 Stock 112.83 +3.12 Don

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#34441 May 25, 2016

I had posted earlier but the forum was slow so I ended up posting my message twice. This is why Facebook will work better. My post is not a criticism. It is an explanation. Within minutes of your posting I received a dozen emails requesting clarity. Many investors are here learning and can lose capital quickly as you can see from the long list of repairs I have done from those who used Delta to pick strike points to sell whether calls or puts as they believed it works. Your article started with the sentence .There is a simple way to know the Probability of an out-of-the-money becoming in the Money.. .Hence the dozen or so emails. Delta is not probability of selling options but designed for hedging positions against volatility. Use it for what you want. My post was a quick way to answer all investors who are still emailing me as I post this.This is my job as moderator. We need to understand there are many members, most of whom do not post but follow along.Teddi Knight From: CoveredCalls-NakedPuts

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#34448 May 25, 2016

Thank you very much for clarifying.

It is a great Web site for investors. Keep up the good work.

May be you work too hard as both an investment advisor and a group Moderator. T

ake it easy ;-)

From: "'Teddi Knight' teddi@... [CoveredCalls-NakedPut

I had posted earlier but the forum was slow so I ended up posting my message twice. This is why Facebook will work better. My post is not a criticism. It is an explanation. Within minutes of your posting I received a dozen emails requesting clarity. Many investors are here learning and can lose capital quickly as you can see from the long list of repairs I have done from those who used Delta to pick strike points to sell whether calls or puts as they believed it works. Your article started with the sentence .There is a simple way to know the Probability of an out-of-the-money becoming in the Money.. Hence the dozen or so emails. Delta is not probability of selling options but designed for hedging positions against volatility. Use it for what you want. My post was a quick way to answer all investors who are still emailing me as I post this.This is my job as moderator. We need to understand there are many members, most of whom do not post but follow along.Teddi Knight From: CoveredCalls-NakedPuts

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#34467 May 26, 2016

CMI

STO June 120NC@ .58 (23 days)

79.7% chance stock will remain below the strike at expiry

5.3% OTM

D= .21

Stock at 113.63 +.46

Don