Friday, March 23, 2012

Profitable Trade: Pepsico (PEP) Naked Puts

Today in a taxable account I closed the following trade for a profit:

02/09/2012    STO 2 PEP Mar 17 2012 62.5 Puts @.7                      128.51
03/06/2012    BTC 2 PEP Mar 17 2012 62.5 Puts @.63                   -137.48
03/06/2012    STO 2 PEP July 21 2012 60 Puts @1.58                     314.36
03/23/2012    BTC 2 PEP July 21 2012 60 Puts @.6                       -131.48

We made $173.91 in 42 days on ~$1800 in margin maintenance. This is a 9.66% return on maintenance or 83.94% annual. I could have waited it out and slowly let these puts expire worthless but we had wrung the fast money out of the trade and I'm looking for other places to use the money to get a higher return.

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