Last week I continued my GDX investment as follows:
03/20/2012 STO 3 GDX Apr 21 2012 47.0 Put @ .53 146.75
04/20/2012 BTC 3 GDX Apr 21 2012 47.0 Put @.63 -201.24
04/20/2012 STO 3 GDX May 19 2012 45 Put @.97 288.70
05/14/2012 BTC 3 GDX May 19 2012 45 Put @3.46 1050.24
05/14/2012 STO 3 GDX Jun 16 2012 45 Put @3.99 1194.68
06/01/2012 BTC 3 GDX Jun 16 2012 45 Put @1.20 - 372.25
06/01/2012 STO 3 GDX Jul 21 2012 43 Put @1.60 467.74
07/19/2012 BTC 3 GDX Jul 21 2012 43 Put @1.40 -432.24
07/19/2012 STO 2 GDX Sep 22 2012 42 Put @2.41 470.50
In this latest option roll I was able to get paid $38.26 to roll down a strike AND to reduce my exposure to 2 contracts. By reducing the number of contracts we were able to reduce our maintenance requirement from ~$3200 to ~$2100 thereby freeing up money for other trades. In addition, our percentage return on maintenance increases with the reduction in required maintenance.
It had never occurred to me before to reduce the number of contracts as I roll down and out. Props to Teddi Knight at FullyInformed.com for sharing her experience and insight in that regard.
We have now collected $512.40 in option premium on this trade. Our cost basis if put to us is down to $39.44/share. While this ETF has sunk to new lows recently our cost basis is below that.
The September expiration will make this trade 6 months old. If the shares expire worthless we will earn $512.40 on an average of ~$2600 in margin maintenance. This equates to a return on maintenance of ~19.7% or or 39.4% annual.
Showing posts with label naked puts. Show all posts
Showing posts with label naked puts. Show all posts
Wednesday, July 25, 2012
Friday, July 13, 2012
Profitable Trade: Proctor & Gamble (PG) Naked Puts
Today I closed the following transaction for a profit:
06/18/2012 STO 2 PG Jul 21 2012 60 Puts @.61 $110.49
07/13/2012 BTC 2 PG Jul 21 2012 60 Puts @.04 $ 8.03
This is a 25 day trade that has used ~$2500 in margin maintenance. We earned $102.46. This equates to a 4.1% return on maintenance or 60% annual. Thank you Bill Ackman!
I would have liked to have rolled the 60's each month but the stock's sudden rise made me want to take a wait and see approach.
06/18/2012 STO 2 PG Jul 21 2012 60 Puts @.61 $110.49
07/13/2012 BTC 2 PG Jul 21 2012 60 Puts @.04 $ 8.03
This is a 25 day trade that has used ~$2500 in margin maintenance. We earned $102.46. This equates to a 4.1% return on maintenance or 60% annual. Thank you Bill Ackman!
I would have liked to have rolled the 60's each month but the stock's sudden rise made me want to take a wait and see approach.
Monday, June 18, 2012
New Trade: Proctor & Gamble (PG) Naked Puts
Today with PG trading down at ~61.80 I entered into the following transaction:
06/18/2012 STO 2 PG Jul 21 2012 60 Puts @.61 $110.49
This is a 33 day trade that starts out using ~$2000 in margin maintenance. If they expire worthless we will earn 5.52% return on maintenance in 33 days or 61.05% annual.
PG, a tried and true Dividend Champion/Aristrocrat, has shown a lot of support at the 60 level. If put to us our yield on cost will be 3.78% which is much higher than the historical average. If the price sinks we should be able to roll out and down for a net credit, therefore, an exit strategy is in place.
06/18/2012 STO 2 PG Jul 21 2012 60 Puts @.61 $110.49
This is a 33 day trade that starts out using ~$2000 in margin maintenance. If they expire worthless we will earn 5.52% return on maintenance in 33 days or 61.05% annual.
PG, a tried and true Dividend Champion/Aristrocrat, has shown a lot of support at the 60 level. If put to us our yield on cost will be 3.78% which is much higher than the historical average. If the price sinks we should be able to roll out and down for a net credit, therefore, an exit strategy is in place.
Friday, June 8, 2012
Trade Continuation: GDX Naked Puts
Yesterday I continued the following transaction:
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
I took the opportunity with the recent strength in GDX to roll out and down 3 strikes for a net credit of $68.43. We have now collected $353.14 in option premium. If put to us at the new strike our cost basis will be $40.82. Not bad considering GDX was trading at 50 at the time we entered into this trade.
If these puts expire worthless we will earn $353.14 in 4 months on an average of ~$2300 in margin maintenance. This equates to a 15.35% return on maintenance or ~46% annual.
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
I took the opportunity with the recent strength in GDX to roll out and down 3 strikes for a net credit of $68.43. We have now collected $353.14 in option premium. If put to us at the new strike our cost basis will be $40.82. Not bad considering GDX was trading at 50 at the time we entered into this trade.
If these puts expire worthless we will earn $353.14 in 4 months on an average of ~$2300 in margin maintenance. This equates to a 15.35% return on maintenance or ~46% annual.
Monday, April 2, 2012
Profitable Trade: Walgreen's (WAG) Naked Puts
Today I closed the following transaction for a profit:
02/28/2012 STO 3 WAG Apr 21 2012 31 Puts @.59 164.71
04/02/2012 BTC 3 WAG Apr 21 2012 31 Puts @.05 -15.04
We made $151.67 in 33 days on ~$1400 in margin maintenance. This equates to a return on maintenance of 10.83% or 119.78% annual. These returns are inflated because there was an upcoming quarterly report and fear of fallout from the Express Scripts deal.
02/28/2012 STO 3 WAG Apr 21 2012 31 Puts @.59 164.71
04/02/2012 BTC 3 WAG Apr 21 2012 31 Puts @.05 -15.04
We made $151.67 in 33 days on ~$1400 in margin maintenance. This equates to a return on maintenance of 10.83% or 119.78% annual. These returns are inflated because there was an upcoming quarterly report and fear of fallout from the Express Scripts deal.
Friday, March 30, 2012
New Trade: Proctor & Gamble (PG) Naked Puts
Yesterday in a taxable account I entered into the following transaction:
03/29/2012 STO 2 PG July 21 2012 62.5 Puts @.88 164.47
Proctor & Gamble is a tried and true Dividend Champion. It was showing a bit of weakness yesterday trading at 66 and change so I pulled the trigger on this little trade. PG is set to raise it's dividend next quarter so the share price should be supported a bit by the increase in yield. As of now the yield is 3.1%. If put to us our yield on cost, with the raise, will exceed 3.6% which is well above the historical average. The maintenance requirement on this trade is ~$2000. If these puts expire worthless we will earn $164.47 in 114 days on $2000 of margin maintenance. This equates to an 8.2% return or 26.25% annual. At this price we should be able to roll out and down for a net credit so we have an exit strategy in place.
03/29/2012 STO 2 PG July 21 2012 62.5 Puts @.88 164.47
Proctor & Gamble is a tried and true Dividend Champion. It was showing a bit of weakness yesterday trading at 66 and change so I pulled the trigger on this little trade. PG is set to raise it's dividend next quarter so the share price should be supported a bit by the increase in yield. As of now the yield is 3.1%. If put to us our yield on cost, with the raise, will exceed 3.6% which is well above the historical average. The maintenance requirement on this trade is ~$2000. If these puts expire worthless we will earn $164.47 in 114 days on $2000 of margin maintenance. This equates to an 8.2% return or 26.25% annual. At this price we should be able to roll out and down for a net credit so we have an exit strategy in place.
Sunday, March 18, 2012
Trade Continuation: Walgreen's (WAG) Naked Puts
In a taxable account I continued the following transaction:
02/27/2012 STO 4 WAG Mar 17 2012 32 Puts @.23 78.99
03/06/2012 BTC 4 WAG Mar 17 2012 32 Puts @.3 -133.00
03/06/2012 STO 4 WAG Apr 21 2012 31 Puts @.7 276.94
This was another trade I couldn't monitor while on vacation and disconnected from the world... so I rolled it down and out for a credit. Margin maintenance on this trade is down to $1532.00. If these expire worthless we will earn $222.93 in 54 days which equates to a return on maintenance of 14.55% or 98.35% annual. Not too shabby. :)
02/27/2012 STO 4 WAG Mar 17 2012 32 Puts @.23 78.99
03/06/2012 BTC 4 WAG Mar 17 2012 32 Puts @.3 -133.00
03/06/2012 STO 4 WAG Apr 21 2012 31 Puts @.7 276.94
This was another trade I couldn't monitor while on vacation and disconnected from the world... so I rolled it down and out for a credit. Margin maintenance on this trade is down to $1532.00. If these expire worthless we will earn $222.93 in 54 days which equates to a return on maintenance of 14.55% or 98.35% annual. Not too shabby. :)
Profitable Trade: Proctor & Gamble (PG) Naked Puts
In a taxable account the following naked puts expired worthless:
01/23/2012 STO 4 PG Mar 17 2012 60 Puts @ .29 153.36
We earned 3.64% in 54 days on a margin maintenance requirement of $4209.60. This includes commission costs and equates to 24.6% annual.
01/23/2012 STO 4 PG Mar 17 2012 60 Puts @ .29 153.36
We earned 3.64% in 54 days on a margin maintenance requirement of $4209.60. This includes commission costs and equates to 24.6% annual.
Tuesday, February 28, 2012
New Trade: Walgreen's (WAG) Naked Puts
Today in a taxable account I entered into the following transaction:
02/28/2012 STO 3 WAG Apr 21 2012 31 Puts @.59 164.71
Walgreen's is a Dividend Champion, Dividend Achiever and Dividend Aristocrat. If these puts expire worthless we will earn 11.59% in 53 days on $1421.06 in margin maintenance. This equates to 79.82% annual. If the stock drops below support levels it appears that we can roll down and out for a net credit....and I only roll for a net credit.
02/28/2012 STO 3 WAG Apr 21 2012 31 Puts @.59 164.71
Walgreen's is a Dividend Champion, Dividend Achiever and Dividend Aristocrat. If these puts expire worthless we will earn 11.59% in 53 days on $1421.06 in margin maintenance. This equates to 79.82% annual. If the stock drops below support levels it appears that we can roll down and out for a net credit....and I only roll for a net credit.
Thursday, February 2, 2012
Profitable Trade: GDX Naked Puts
Today in a taxable account I closed the following transaction for a profit:
01/20/2012 STO 4 GDX Feb 18 2012 49 Puts @.57 214.89
02/02/2012 BTC 4 GDX Feb 18 2012 49 Puts @.03 -12.05
In this trade we made $202.84 in 13 days on margin maintenance of ~ $3200.00. This equates to a return of 6.34% or 178% annual. I could have waited for these puts to expire worthless but we had drained most of the profit out of the trade and there was no commission at exit. I'm going to be looking for other, more profitable opportunities in this account.
01/20/2012 STO 4 GDX Feb 18 2012 49 Puts @.57 214.89
02/02/2012 BTC 4 GDX Feb 18 2012 49 Puts @.03 -12.05
In this trade we made $202.84 in 13 days on margin maintenance of ~ $3200.00. This equates to a return of 6.34% or 178% annual. I could have waited for these puts to expire worthless but we had drained most of the profit out of the trade and there was no commission at exit. I'm going to be looking for other, more profitable opportunities in this account.
Monday, January 23, 2012
New Trade: Proctor and Gamble (PG) Naked Puts
Today in a taxable account with PG down below 65 due to some analyst downgrades I entered into the following transaction:
01/23/2012 STO 4 PG Mar 17 2012 60 Puts @ .29 153.36
Proctor & Gamble doesn't really need much of an introduction. It is a Dividend Champion, Dividend Aristocrat, blue chip, widow and orphan holding. It will be raising it's dividend next time around. If these get put to us our yield on cost would be over 3.5%, before the dividend increase. PG has shown great support at the 60 level. If the price sinks we have the option of taking the shares, writing covered calls and collecting dividends or rolling the position. We like both of these alternatives. If these puts expire worthless we will earn 3.64% in 54 days on a margin maintenance requirement of $4209.60. This includes commission costs and equates to 24.6% annual.
01/23/2012 STO 4 PG Mar 17 2012 60 Puts @ .29 153.36
Proctor & Gamble doesn't really need much of an introduction. It is a Dividend Champion, Dividend Aristocrat, blue chip, widow and orphan holding. It will be raising it's dividend next time around. If these get put to us our yield on cost would be over 3.5%, before the dividend increase. PG has shown great support at the 60 level. If the price sinks we have the option of taking the shares, writing covered calls and collecting dividends or rolling the position. We like both of these alternatives. If these puts expire worthless we will earn 3.64% in 54 days on a margin maintenance requirement of $4209.60. This includes commission costs and equates to 24.6% annual.
Thursday, January 19, 2012
New Trade: Johnson and Johnson (JNJ) Naked Puts
Today in a taxable account with JNJ trading at just under 65 I entered into the following transaction:
01/19/2012 STO 4 JNJ Apr 21 2012 60 Puts @.77 294.89
JNJ is obviously a long term hold. It is a dividend aristocrat, dividend champion, blue chip, widow and orphan core holding. If put to us our yield on cost will be over 3.8% with a dividend increase expected shortly after. We could then write covered calls on the position. If the puts expire worthless we will earn 8.73% in 93 days on margin maintenance of $3377.60 which equates to 34.26% annual. Of course we could choose to roll the position, we'll just have to see how things shake out.
01/19/2012 STO 4 JNJ Apr 21 2012 60 Puts @.77 294.89
JNJ is obviously a long term hold. It is a dividend aristocrat, dividend champion, blue chip, widow and orphan core holding. If put to us our yield on cost will be over 3.8% with a dividend increase expected shortly after. We could then write covered calls on the position. If the puts expire worthless we will earn 8.73% in 93 days on margin maintenance of $3377.60 which equates to 34.26% annual. Of course we could choose to roll the position, we'll just have to see how things shake out.
Thursday, January 12, 2012
Profitable Trade: SLV Naked Puts
Yesterday in a taxable account I closed the following transaction:
12/22/2011 STO 8 SLV Dec 30 2011 26 Puts @.09 55.94
12/29/2011 BTC 8 SLV Dec 30 2011 26 Puts @.38 -320.05
12/29/2011 STO 8 SLV Jan 21 2012 25 Puts @.7 +553.88
01/11/2012 BTC 8 SLV Jan 21 2012 25 Puts @.04 -32.10
This trade netted $257.67 in 19 days on ~ $2200 in margin. That is a return on margin of 11.71% or 224.95%. It also allowed me to exceed my goal of making 2 - 3% a month by writing naked puts on margin in this little account. I didn't milk the last $32 of the trade so I could possibly take advantage of the new weekly options that come out today. If one can enter into weekly option trade on Thursday or Friday, studies have shown that over the weekend there is ~ 30% drop due to time decay.
I should note that with the money I've made in this account through recent trades I am able to add to my holdings in my core dividend growth portfolio. Every time I earn $1000 I add to my holdings. Today I added 14 shares of Conoco-Phillips at 71.62. The yield is 3.67% and they are set to raise the dividend next time around. I like the idea of the company splitting and spinning off shares my way. I look at this as another little boat set to sail that will compound over time and bring me passive income.
12/22/2011 STO 8 SLV Dec 30 2011 26 Puts @.09 55.94
12/29/2011 BTC 8 SLV Dec 30 2011 26 Puts @.38 -320.05
12/29/2011 STO 8 SLV Jan 21 2012 25 Puts @.7 +553.88
01/11/2012 BTC 8 SLV Jan 21 2012 25 Puts @.04 -32.10
This trade netted $257.67 in 19 days on ~ $2200 in margin. That is a return on margin of 11.71% or 224.95%. It also allowed me to exceed my goal of making 2 - 3% a month by writing naked puts on margin in this little account. I didn't milk the last $32 of the trade so I could possibly take advantage of the new weekly options that come out today. If one can enter into weekly option trade on Thursday or Friday, studies have shown that over the weekend there is ~ 30% drop due to time decay.
I should note that with the money I've made in this account through recent trades I am able to add to my holdings in my core dividend growth portfolio. Every time I earn $1000 I add to my holdings. Today I added 14 shares of Conoco-Phillips at 71.62. The yield is 3.67% and they are set to raise the dividend next time around. I like the idea of the company splitting and spinning off shares my way. I look at this as another little boat set to sail that will compound over time and bring me passive income.
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