6/29/12

Cherif Medawar
CherifMedawar@yahoo.com
•  RE Investor
•  Educator
•  Founder of CMREI
•  Syndicator
•  Securities Trader

Disclaimers
•  Cherif Medawar is a successful investor, trader and business
developer. He is the founder of CMREI an education, training
and investment company. Cherif teaches business models as
well as trading systems and syndication methods

•  Cherif Medawar is not an attorney or CPA and does not provide

any trading, legal or tax advice.

•  Always consult a qualified attorney or a registered advisor for

real estate, business, legal advice or stock and options trading

•  This presentation is made in an effort to clarify Cherif

Medawar’s investment business models and style of trading.
His results are unique and should not be considered the norm

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Trading
The Securities Market
for Cash Flow
and
Freedom

Stocks and Options

Definition
Concept
Business Model
Application for success

Definitions
Stock and Option (Leaps-SP-ITM-OTM-P-ED)
Exchanges (Wall Street- CBOE etc,)
Market Makers- Brokerage firm
Margin- Margin call –Maintenance Requirement
GFD- GTC- Market, Limit or Stop Order
Fundamental- Technical and Practical
Stocks: Buy Long or Sell Short (Ask-Bid)
Options: Buy Calls or Buy Puts (Buy at Ask)
Sell Calls or Sell Puts (Sell at Bid)

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Definitions
An Option Contract = 100 Shares
Combo strategies- Spreads
Stock Put to you
Getting called out vs. covered calls
Stock BP (Buying Power)
Day trade BP- Option BP
Buy back and roll out
Closing a position
Letting a position Expire

Concept

Making money from publicly traded stocks

and their derivatives by:
1)  Buying and Selling Stocks
2)  Buying and Selling Options Covered
3)  Buying and selling Options Naked
4)  Combination strategies Stocks and Options
5)  Combo strategies Calls only or Puts only
6)  Combo strategies Options Calls and Puts

Business Model

1)  Open a trading acct. with a discount

brokerage firm ($25K) and access it on-line
2)  Get highest approval for Margin and Trading
3)  Select a few good companies (Businesses)
4)  Execute the best strategies based on timing
5)  Monitor, Correct and Profit by managing
your positions and your capital
6)  Minimize loss and Maximize profits

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Application for Success

1)  Review my half a day intro to stocks and
options trading on-line videos to know the
definitions and how to place orders on line
2)  Select companies (based on fundamentals)
3)  Watch their charts (Technical analysis) to
understand the range of price fluctuation
4)  Stay updated on any news that may affect
your stock price direction (Practical)
5)  Place trades accordingly and manage your
positions and your money

Demonstration

Let’s go Online!

Strategies:
1)  Buy Stock long (intraday)
2)  Sell Stock short (intraday)
3)  Buy Calls (10C = 1000 Shares)
4)  Buy Puts
5)  Sell Calls Covered (You own the stock)
6)  Sell Calls Naked
7)  Sell Puts Naked
8)  Sell Puts Covered (You short the stock)

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Strategies:
9) Credit Spreads
10) Credit Spread Combo
11) Short Strangle (Mid-Range Price)
12) Short Strangle (Fluctuating Price Range)
Manage Money (Entry Points and Margin)
Protect, Maximize and Correct Positions
Do not Panic or cash out too soon
Do not trade often – Don’t be Greedy!

Short Strangle: #12 a) Selling Puts

1)  Stock price down (bottom of range)

2)  Sell Naked Puts (Maint. Req.)
3)  Lower strike price OTM
4)  One to Two weeks out (Exp. Date)
5)  Allocate a percentage of cash in account
6)  Use same amount if price goes lower
7)  If price goes higher Sell Naked Calls
using same number of contract as Puts

Short Strangle: #12 b) Selling Calls

1)  Stock price up (top of range)

2)  Sell Naked Calls (Maint. Req.)
3)  Higher Strike Price OTM
4)  One to Two weeks out (Exp. Date)
5)  Allocate a percentage of cash in account
6)  Use same amount if price goes higher
7)  If price goes lower Sell naked Puts using
same number of contracts as Calls

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Short Strangle: #12 Profit Goal

1)  Goal is to let both positions expire and keep
all Option Contract premiums collected
2)  There are three possibilities:
a)  Stock stays the same or within a small range
of price fluctuation (not hitting Strike Prices of
Call or Puts sold)
b)  Stock goes higher c) Stock goes lower
3) You can close at anytime any profitable
position to keep the difference in Premiums

Monitor 1: #12 Stock stays same

Based on price on Friday of Expiration day:

1)  Stock does not get put to you (Puts)

2)  Stock does not get called out from you (Calls)
3)  Puts and Calls Option Contracts expire
4)  You keep all the premiums
5)  Do it again (same stock till it moves to a new
range)

Monitor 2: #12 Stock Goes Up

Based on Friday Expiration day: a) Puts:

1) Stock does not get put to you

2) Put Option Contracts expire
3) You keep the Put premiums
4) Do it again when stock pulls back down
Or
5) Do it again now but further out in time at
same strike price (4-5 weeks out)

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Correction 1: #12 Stock goes up

Based on Friday Expiration day: b) Calls:
You can get called out of the stock (must buy
at higher price and deliver at SP sold)
1)  Buy back and Roll Out:
A) Buy Back all Call Option Contracts at
last minute (Friday before 4PM EST)
B) Re-Sell a Naked Call same or higher
strike price 1 or 2 weeks out in time (ED)
2) Wait till next expiration to keep premiums

Correction 2: #12 Stock Goes Up

Based on Friday Expiration day: b) Calls:
Stock price moving up getting closer to SP

1)  Place a Stop Order to Buy (GFD) at pennies

below Strike Price (SP) of Calls sold
2)  If Stock goes higher you are in a Covered
Call position (Get called out and get cash)
3)  If Stock does not go higher, Call Contracts
expire and you keep the Premiums

Correction1: #12 Stock goes down

Based on Friday Expiration day: a) Puts:
Stock will be put to you if you do nothing-
(You will own the shares at SP sold minus
premium collected)
1)  Buy back and Roll Out:
A) Buy Back all Put Option Contracts at last
minute (Friday before 4PM EST)
B) Re-Sell a Naked Put same or lower
strike price 1 or 2 weeks out in time (ED)
2) Wait till next expiration to keep premiums

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Correction 2: #12 Stock goes down

Based on Friday Expiration day: a) Puts:
Stock will be put to you if you do nothing
1)  Let the Stock get Put to you- (Own shares)
A) Sell Covered Calls next Strike Price up
(provided you make money if called out)
B) Sell Naked Puts next Strike Price down
2) Wait till you get called out or get more
share averaging down minus 2 premiums
collected and sell covered calls to get out

Conclusion
1)  Manage Positions and Capital (Timing)
2)  You are trading against Market Makers
3)  Do not spend too much time trading
(Less trades: Monitor, Correct & Profit)
4)  Correcting trades is 50% of the gains
5)  Get the cash flow sooner or later
6)  Trade with money/capital you can afford
to lose (No lifestyle impact)
7)  Do Not rely on the Trading Cash Flow

Cherif Medawar
CherifMedawar@yahoo.com

SUCCESS
Story!

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Cherif Medawar
CherifMedawar@yahoo.com
•  RE Investor
•  Educator
•  Founder of CMREI
•  Syndicator
•  Securities Trader
www.CMREI.com