Close XLB Position for a Profit

I bought insurance puts on XLB (Materials Select Sector SPDR Fund) at the beginning of last week and then sold XLB puts at a lower strike and nearer expiration a couple of days lower to cut my costs.  I ended up profiting on both legs.  The puts I sold expire in three days and the puts I bought have a month to go.  With the markets falling again I took the opportunity to take a profit on both while I could.  I might have been able to make more on the puts I sold by letting them expire worthless, but decided to get out while I could with a profit.  I also removed the hedge I had since I think our downside risk is smaller than our upside potential at current prices.

While XLB was trading at $26.76 I sold to close my four November 32 puts (XLBWF) for $5.50 each and received $2,186.99 after commissions.  This order was from a limit order I placed last night. Originally I bought these for $1,812.99, giving me a profit of $374.00.

Once the first order hit and I got back to my desk, while XLB was trading at $26.29 I bought to close my four October 25 puts (XLBVY) for $0.40 each and paid $172.99 with commissions.  Originally received $287.00 for these puts, giving me a profit of $114.01.

I have a lot more out there that I’m losing on, so I’m happy to have found something that worked this month.  Selling my QCOM calls in the money yesterday turned out to be a great move so far since QCOM has fallen below the strike already.  Now it looks like I should’ve sold deeper in the money.  If QCOM comes back above 40 by Friday’s close, I’ll be ready to stay out of it for at least 31 days.