Sold MON Naked Put

This is turning into a recurring theme for me.  Instead of finding new stocks to trade on, I’m going back to previous winners and trading again.  This time I came back to Monsanto (MON) to try to squeeze out another profitable trade.  I sold June 110 naked puts on MON last time.  Before that I sold April 100 naked puts.  Prior to that I sold January 95 naked puts on MON and started my MON trades 13 months ago with a July 60 naked put

Before June options expired I watched MON start to fall from its highs.  I didn’t think I was in much danger of having it fall all the way to 110 to cause an option assignment, but continued to watch thinking that I’d be back in when I thought I could find a good entry point.  Options expired and MON continued to fall.  Implied volatility never got out of control, but was still high (near 50) compared to other equities.  I considered the 120 strike, but thought with a stock this volatile I need to leave more of a cushion for it to bounce around.  While at MON was continued its slide this morning and was trading at $124.13 I sold one August 115 naked put (MFPTC) and received $499.25 after commissions.  MON went as low as 122.40 five minutes later and five minutes after that it was back up above 125 and made it back above 130 two hours after that. 

I’m not calling an absolute bottom on it yet, but I’m very happy with how this one played out today.  My trade at $5.10 is the high of the day so far.  I have a paper profit of $160 on this option so far and it has only been three hours.  That’s nice after losing $1600 on paper yesterday.  Most of my losses for yesterday are on options that are still trading out of the money, so I’m still fairly relaxed with this current market correction.