Closed NDAQ Naked Puts for a Profit

NDAQ has been a volatile play for me and I’ve profited a few times on my options, but felt I was starting to tempt fate with some wild moves in the stock.  This morning NASDAQ OMX said they are losing market share.  The details go much deeper, but that was enough for me to take my profits and let the dust settle more before I extend myself with it again.  While NDAQ was trading at $20.28 I bought to close my 5 NDAQ May 20 naked puts (NQDQD) for 0.80 each and paid $413.74 with commissions.  Originally I sold the NDAQ naked puts and took in $951.23.  This gives me a realized gain of $537.49.  NDAQ made it as low as $19.17 this morning before recovering to the mid $19s where it was when I put in my limit order to close my position.  It made it a little higher than $20.30 before settling into a more sideways afternoon around $20.00

I expect it won’t take me long to find a new entry point.  I’m actually eyeing the June 17.50 puts already and might go ahead and put in a limit order to hit on another dip.  Does it sound like I’m talking myself into it as I write this?  I think NDAQ will find its way back up from this, but I have no desire to be invested in it at $20.00 (minus premiums) while it tries to figure it out.  It’s one of my 2009 stocks of the year picks which shows why I invest with options rather than buy and hold stocks.  I’ve made more than $1,400 on NDAQ this year while it’s down for the year to date.

On another note, SLB gapped up this morning to $58.64 before collapsing down to $53.31 while I write this.  It gave me a few moments of worry while it was up, but I wanted to give it another couple of days before try to adjust my position.  I was considering June 55 puts to add to my June 45 puts and June 55 calls, but for now I can wait it out a little longer.  If this drop in the markets continues my DIA options could turn back to a profit which would be a nice turn of events for me too.