Looking for More Profit from NASDAQ (NDAQ)

I’ve been coming back to the NDAQ well for more profits ever since I picked them as one of my 2009 stock picks at the beginning of the year.  They are actually down from when I picked them, but that’s why I’m not a buy and hold type investor, but an option seller.  I’ve done well with NDAQ so far this year and after my June options expired out of the money last week I came back for another run with them this afternoon.

While NDAQ was trading at $20.17 I sold three NDAQ July 20 naked puts (NQDSD) at 0.95 and received $272.74 after commission.  With my cautious mindset I could’ve hedged with a lower strike, but I don’t think NDAQ is heading as far south as $17.50.  So instead of hedging, I didn’t sell as many put contracts as I have in the past.  If assigned, I’m only in for $6,000 worth which would be a cost of around $19.15 after the commission from option assignment.  From there I’ll expect NDAQ to rally above $20 again or I’ll just sell covered calls at the $20 strike to work the position back to a profit.

I think the longer term profit outlook will keep it from sinking too deep and the chart looks like it could be at a good turning point near here.  Yesterday NDAQ closed below its 50 day moving average, but it didn’t get a confirmation close below that today as it rallied some and managed to keep its head above that tipping point, for now.  I’ll keep working on my NDAQ position and can add to it with new naked puts and covered calls down the road to bring in more premiums and further reduce my cost per share if needed.