Rocky’s Weekly Stock Picks
We’re a bit more lucid this week, and going with a theme. Sort of two themes in one. Conjoined themes.
We’re looking for a 5% return on investments in penny stocks!
What is a Penny Stock?
The Internet doesn’t know. There’s about a million different answers. Here’s a copy/pasted excerpt that I personally agree with most
…between.0001 and 5.00, and we've found….
“Under $5” seems to be the most common answer, based on a quick and casual search of the mainstream internet. However, we also found answers ranging from “Under $1” to “Under $50”.
There’s also answers that don’t specifically address the price of the stock, but instead the market cap of the stock. Here’s some more copy/pasted information
A penny stock, more formally known as a microcap stock, is a share of a company that typically has a market capitalization of less than $300 million. Nanocap stocks, also a type of penny stock, are issued by companies that typically have a market capitalization of less than $50 million. Penny stocks usually trade for less than $5 per share.
And there we go again with “under $5”, though another site discussing market cap says “under $10” and doesn’t say anything about nanocaps.
For our purposes, we’re looking at the $3-$6 range, but that’s subject to change (as these articles are written and published “on-the-fly” with little to no post-editing).
ATOS - Stock price closed at $3.37 on Friday. We’ve been getting 5%/week from rolling CSP’s for a while now.
RIDE - $5.91, looking at a potential 7% return on ATM CSPs at market open on Monday. We play RIDE from time to time, and are comfortable owning the shares if we are assigned. We’re also comfortable trading, as well as with buy and hold.
(Generally speaking, all of our picks are recommended for any investor or trader, regardless of the specific action or play suggested).CODX - Not really what we’d think of as a penny stock, and it exceeds our guidelines. However, consider this. The price closed at $9.66, with options at $9.5 and $10. The $10 put has a bid/ask between .65 and .90. The $9.50 put has a bid/ask spread of .40 to .60. Easy 5% return.
As far as price speculation goes, we expect CODX to go up in the near short-term. That said, we tread lightly with this one, even though it’s a house favorite - it’s prone to doing the exact opposite of our expectations.EXPR - Currently listed price is $5.50. We have $5.50 options. If you can’t afford a cash secured put, how about a LEAP? We aren’t opposed to getting assigned on a CSP, but recommend against buying shares outright (contrary to our previous, general disclaimer).
OPK - We spent a couple hours searching through stocks for something that would satisfy our various criteria, and ran out of time. The price is mid-way between strikes, at 3.72. We suggest selling a $4 put, buying a $4 call, and selling a $3.5 call.
Or just sell the put. If we get stuck with the shares, we can write an ITM call or something to get rid of them at a profit.
