Closed NDAQ and UCO Naked Puts

To speed up the clean up of my TD Ameritrade account before I close it I decided to close a couple of my positions early.  Depending if today’s broad market drop continues through tomorrow I might have to buy back some of my other options too.  I started with NDAQ and UCO because NDAQ was in the money and would have likely been assigned after tomorrow’s close.  I had a profit on UCO for the day and it didn’t expire until December.  Since the chart I drew of UCO (and USO) looked like it was at the top of its trading range I figured I should get out while I could.  While UCO was trading at $13.87 I bought to close four UCO December 13 naked puts (UCOXF) for $0.70 each and paid $292.99 including commissions.  Originally I sold these naked puts at $$0.85 and received $327.00.  That gives me a profit of $34.01.

I still have high hopes for NDAQ’s recovery, but time isn’t on my side right now compared to my desire to transfer my entire account immediately.  I posted an NDAQ chart yesterday to show that it’s at a turning point.  In the end, I decided not to take the risk of NDAQ turning below its 10 day moving average and back down to the low end of its trading range.  While NDAQ was trading at $19.24 my limit order hit and I bought to close six NDAQ November 20 naked puts (NQDWD) for $0.80 each and paid $494.49 including commissions.  Originally I sold these NDAQ puts in two lots, three at $0.80 and three at $1.05.  That brought in $530.50 after commissions which leaves me with an overall profit of $36.01 for both lots combined.

I canceled two lower limit orders to get both of these orders to hit.  At TD Ameritrade there’s no charge for that.  Once my account is moved to Interactive Brokers I will be charged for those cancelations , but even with that additional charge at IB I’d still have paid much less in commissions to close these positions there.  I’m starting to get excited about the change for the cost savings, but will miss the AMTD interface.  While I’m in my office at work I’m still blocked from IB’s desktop trading platform and the Web version leaves a lot to be desired.  The good news is that I work from home two to three days per week.

The rest of my options are sitting out of the money still, but their underlying stocks are falling and some are getting closer to moving below their strikes (in the money).  Not counting premiums I’ve taken in, I have a $0.61 cushion above the strike on EEM, $0.54 on FWLT, $3.91 on QLD, $0.71 on SSO and $2.01 on UWM.  I considered closing all of them out today and not risking a steeper fall tomorrow, but figured the two I closed today was enough for now.  If I add in the cost to trade and the time value left for the next day and a half I’d have to pay $25-35 per position to close each one.  I don’t think all, if any, will move deeper than the current time value by tomorrow’s close.  If they do, then I’ve made a mistake by waiting.  It’s a small risk either way, so I’m waiting it out.  Needless to say, I’ll be watching closely until 4:00 pm tomorrow.  I already withdrew $40,000.00 from my account this week and plan to transfer most of the rest next week when everything has settled.  I’ll close the account after I receive my dividend and interest payments due for November.