Sold FWLT October 33 Naked Puts

I’ve sold FWLT naked puts, owned shares and sold covered calls a few times over the past couple of years and I continue to watch it on a fairly regular basis.  FWLT had been bumping up against resistance recently on its trend line of higher highs, but broke out this morning on very strong volume.  This made me want to put some money to work on FWLT.

I charted FWLT to see where I should set my naked put strike and decided $33 looked like a good price area of potential support.  It plays in with the idea that previous resistance often becomes support on a pull back.  While FWLT was trading at $34.87, I sold two October 33 naked puts (UQIVA) for $1.25 each and received $238.50 after commissions.  I expect FWLT to bounce around a decent amount between now and October options expiration just over four weeks away.

I’m sticking with my recent investment approach of only taking a partial position.  It’s gotten me over the hump of being afraid to invest anything at all and so far is paying off in small amounts.  I could’ve gone into FWLT with three puts at the October 34 strike and could have been fine, but I’m more in the mood for lower risk these days, even if it costs me lower returns.  I still have my SSO position to deal with, but I’ll get to that later.