Closed SSO Naked Puts for a Profit

Greed cost me more than $1,000 on my SSO naked puts.  While SSO was trading around $20.75, I bought to close five SSO November 22 naked puts (SOJWV) for 1.80 each and paid $913.74 with commissions.  Originally, back on October 24th, I sold these naked puts for $2.20 and received $1,086.25 after commissions.  That gives me a realized gain of $174.51.  I think the bid ask on these naked puts was down to .25/.30 a couple of weeks ago.  That’s a $750 difference. 

I didn’t buy back my November 25 naked puts and it’s yet to be seen how much that cost me.  It’s over $700 so far.  I’m planning to take the option assignment on those and decided that was enough risk for me right now.  If I see the S&P 500 chart start to turn in my favor I might sell new naked puts at a lower strike to cash in on the bear market bounce.  The next time around, I’ll immediately put a limit order in to sell if I get a 50% profit or at a minimum will buy puts at a higher strike to go along with them as a hedge.

My account balance is down to levels I haven’t seen since I first started blogging at the beginning of Q4 last year.  I made a lot of contributions to my account through July of this year and finally had the sense to stop.  I’m actually thinking that I might not resume the contributions for a while.  I talked to my wife about starting back with $500 or $1,000 per month, but until we see a real indicator that the market could turn and stay up our money is probably better spent paying down our mortgage.  We have no car payments, so our mortgage is all that we have to pay off.  Our interest rate is 5.75% and I used to think that was easy to beat in the market.  It will be again one day, but not yet.  I’m staying long a lot of my positions and might not cover many with calls next week until we can see if we’ll get any kind of dead cat bounce soon to find a better selling point.  I’ve thought that with each $10k I’ve lost and now I think that the only place for some of my stocks to go is bankrupt or double their value.  The gain in selling now is barely worth getting out.