5 Naked Option Trades – AA, CMI, JOYG, USO, CHK

A little more than a week ago when my account recovered half my losses I actually thought about dumping almost everything to have something left when this mess settles down.  I didn’t and now I’m back to my lows again.

Starting this morning down more than $4k made me react quickly.  My first two trades were naked put orders I left in from last week, expecting the bailout to be signed and give us a brief bounce.  Instead we’re down big today.  The VIX is barley under 40, which makes my paper losses look bad, but gives me a lot of room for recovery as the time value on my options decays over the next three weeks.

CMI – While CMI was trading at $43.51, my limit order from last week hit and I sold two October 40 naked puts (CMIVH) at $2.10 and received $408.50 after commissions.  It’s way down from where my options expired last month.  These options are still out of the money.

JOYG – 11 seconds after opening, while JOYG was trading near $46.00 my limit order from last week hit and I sold two October 40 naked puts (JQYWH) at $2.15 and received $418.50 after commissions.  These options are still out of the money, but I’m long 100 shares and it’s way down.

AA - While AA was trading at $21.85 I sold four October 26 naked calls (AAJE) at $0.55 and received $206.99 after commissions.  I’m ready to get out of AA on any rally.  My other calls are for the October 27.50 strike.  If AA goes that high in three weeks, I might have to go short on it.

USO – While USO was trading at $80.76 I sold one October 84 naked call (UNAJF) at $2.75 and received $274.99 after commissions.  I don’t expect oil to rally beyond my other call at the October 90 strike.  I’m fine with this one causing my 100 shares to get called away.

CHK – While CHK was trading at $34.24 I sold two October 40 naked calls (CHKJH) at $0.95 and received $178.50 after commissions.

At 12:30, I’m down $6,600 for the day on paper, but I took in $1,487 in premiums this morning which will help to cut the pain when options expire.  I also sold all of these options out of the money, so any recovery can only help me.  If any of these go in the money, I’ll take the loss to the upside and get out with more than I have right now.  I’ll probably sell more calls tomorrow.  I didn’t want to do it all in the same day if we start to rally this afternoon or tomorrow morning.