Sold SSO September 30 Naked Puts

I’ve been so shy about not getting too deeply invested for the past couple of months I’ve missed out on a lot of potential gains.  After today’s rally started I gave in a little.  I decided to ease in with a half order on SSO, the double S&P 500 ETF.

While SSO was trading at $31.16 I sold two SSO September 30 naked puts (SOJUD) at $1.36 (thanks AMTD for the extra penny) and received $260.50 after commissions.  I planned to hedge any positions I opened for a while, but when I ran the numbers of some different vertical spreads, I decided a couple of naked puts offered me the best risk/reward.  I typically plan my put trades to be between $9-12k if assigned.  With that in mind I first checked the September 31/29 put spreads and almost put an order in to sell at $0.75 each for three.  I decided I’d make more with only two naked options instead and SSO could actually trade lower before I took a loss.  I miss out on the downside protection and that’s why I only sold two instead of three or four options.  If SSO drops below 30 I’ll probably take the put assignment and if I’m more bullish at that point I’ll sell two new puts at a lower strike and possibly sell covered calls on the 200 shares I’ll own at that time.  I said I was going to do that on my IWM puts a month or two ago and chickened out and it cost me profits I would’ve made.  I’m going to try not to make that same mistake this round.