Based on activity reported by subscribers yesterday in the chat room, I’m tracking eight December 620-October 620 put spreads @ 14.00, with a kicker of four September 615 puts shorted @ 6.20.  To reduce margin requirements or get around account restrictions, some of you may have spread off the naked Seps by buying puts of a lower strike. However, if there are any changes in the “official” position, I’ll include specific spread-trading advice as well.

So that we don’t underestimate the potential danger represented by the naked Seps, I’ll monitor their fluctuations closely.  Their delta value is small, but if AAPL were to fall 30-40 points in a day, they would probably rise by enough to at least offset our gains on the spreads. For that reason, I’ll suggest keeping close tabs on my updates, and if you haven’t done so already, signing up for “E-mail Notifications” on your My Account page.  These e-mails are sent out in real time and represent the quickest way I can inform you of a position change. I will generally do so in the chat room as well, and always via a written update to the tout itself, but the ‘Notifications’ feature allows you to tailor the alert on the receiving end to whatever literal bells and whistles you might require.

For now, though, and regardless of whether you’ve already spread off the Sep 615 puts, I’ll suggest bidding 4.20 for four September 625 puts, good-till-canceled. If successful, we’ll have lowered our margin requirement and locked in some better-than-free puts tied to the nearest expiration month.