When trading Options, ScalpTrader likes to identify situations that he thinks are mispriced, will give him the opportunity for income, or provide a more attractive entry into a stock.

In the two examples below, SCALP sold Puts that would give him the chance to own stock at much lower prices or would generate compelling returns. In both cases the options generated a 100% profit.

17-Jun-16 15:20 ET SCALP ScalpTrader Spec Portfolio Addition -- Selling CEQP Puts (20.86 +0.56) Made out well with an earlier swing trade in CEQP, closing out 1/2 on April 21 for 67% & the other 1/2 on April 22 for 54%. Reason I sold was b/c of a big taxable gain that could be passed along to shareholders when its deal to sell/joint venture assets with Con Edison closed. I've been wanting to get back in, but not in the same month that the transaction closed. On June 6 the co announced closing of the deal. While it may be safe to buy the MLP now, I'm not taking any chances b/c there is a big capital gain coming the way of unitholders. So, for now, I'm going to backdoor my way into the stock by selling 10 of the Jan 17 $15.00 Puts for $1.60. This would give me an entry price of $13.40 if put the stock vs the current price of $20.86. If following me in, might want to try for an even higher price, as my $1.60 offer was hit pretty quickly. Current spread is $1.35x1.80. Obviously, I'm not thinking that I'll actually get put stock, so this really just allows me to pick up $1,600 of income. I'll likely pick up some common units some time in July. Notable that CEQP's general partner continues to aggressively buy common units in the open market. In the past month, they appear to have purchased about $20 mln of stock at prices ranging from $18.25 to $23.29. 23-Jan-17 10:24 ET SCALP ScalpTrader Spec Portfolio Update -- CEQP Short Put Position closed for 100% profit The CEQP Short Put position expired on Friday with a 100% profit. These were the Jan '17 $15 Puts.

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30-Jun-16 10:21 ET SCALP ScalpTrader Spec Portfolio: TK Short Put Trade (7.11 -0.31) I'm putting on a 1/3 Short Put position in TK by selling 10 of the Jan 17 $5.00 Puts for $0.55. This would give me a cost basis of $4.45 if put the stock. TK is the parent of TOO, to which we already have exposure, including recently taking profits on the common share position. Still Short some TOO Puts and Long its Preferred TOOprB. I'd been waiting for official news of the secondary pricing to start putting on exposure to TK. Sifting through the SEC filings, it appears that the secondary has now priced at $8.32. I was concerned that recent pullback in the stock would jeopardize the offering or lead to a much lower pricing, given that initial terms suggested that the deal would be priced at a discount to then prevailing stock price. I'm not completely convinced that the stock is done going down, so I'm taking a more conservative approach and starting off with an options trade, rather than buying stock at these levels. 23-Jan-17 10:22 ET SCALP ScalpTrader Spec Portfolio Update -- TK Short Put Position closed for 100% profit The TK Short Put position expired on Friday with a profit of 100%. These were the Jan '17 $5 Puts.