Finished TLT Position

The last of my TLT limit orders hit this afternoon and I am finally completely out of my long series of TLT trades. While TLT was trading at $121.40, I bought to cover 500 shares of TLT at $121.40 and bought to close five TLT December $130 covered puts for $8.94. The combined order sold for $130.34 and I paid $65,176.41 including $6.41 in commission.

TLT dropped as I expected when I originally sold naked calls in September 2015, but it took a detour to $143.59 in the meantime and clearly I didn’t expect that much of a spike. The trade cost me an overall profit for 2016 since I had to sell some of my long positions for a loss after Brexit and had to buy back some of my short TLT shares far above what I wanted to for an additional loss, thanks to margin calls.

The trade had the right idea behind it, but I went too big with my position and didn’t have the cash to back it when it went against me for a few months. I should’ve hedged, but got greedy thinking that history would repeat and there would be a lower ceiling on the ETF. I was wrong and was forced to re-learn a lesson I had been schooled on when I first started trading options. Now I’ll have to see if this lesson really sticks with me or if I will remember this lost year when I debate selling so many naked calls again.

« « Updates on TLT, IWM, and MDY Options - | - End of the Month Summary – November 2016 » »

* If you like this post, then consider subscribing to the Full RSS feed or email updates.

DISCLAIMER: While I am a Registered Investment Advisor Representative, the information contained within this site does not constitue personalized investment advice. This material is meant as entertainment and is only a view into how I invest my own account, but not necessarily how you should invest your own funds. Trade using your own research at your own risk. This is impersonal investment advice which means the material written here, in email exchanges, on Twitter and/or other social networking sites do not purport to meet the objectives or needs of specific individuals or accounts.

Other Popular Articles:

- How to Read an Options Table

- Determining an Exit Price for a Stock

- Understanding Downside Risks in Investing

- How Naked Put Selling Works

- 10 Tips for Keeping Emotions out of Investing

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.