On Friday I closed the following transaction for a net profit:
03/19/2012 STO 3 GDX Jun 16 2012 45 Puts@.99 284.71
06/07/2012 BTC 3 GDX Jun 16 2012 45 Puts@.68 -216.28
06/07/2012 STO 3 GDX Jul 21 2012 42 Puts@.99 284.71
07/20/2012 BTC 3 GDX Jul 21 2012 42 Puts @.55 -177.28
In this trade we generated $175.86 in 4 months on ~2600 in margin maintenance. This equates to a return of 6.76% or 20.29% annual. This trade shows the power of naked puts and the ability to roll them down and out for a net credit. Even though GDX continued to tank throughout this transaction we were able to still turn a profit.
This one was a bit too much of a wild ride for my temperament, however, so I will probably return to trading blue chip stocks with a rising dividend. Right now I'm watching the weakness in MSFT and INTC closely. If MSFT drops below 29 and INTC gets in the low 24's it will be hard not to pull the trigger on some new naked put trades.
20% is not a bad return.
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