End of Year Clean Up

I used today as a house cleaning day. Since I’m sitting on a year with realized losses that are greater than my capital gains, I decided to close all my positions that had a gain rather than drag the gains into 2017. I’ll still have more than the $3,000 limit to right off and will carry the balance into the new year, but at least I cut that deficit a little today.

I placed these closing orders at the end of last week and they all hit within the first 10 minutes of trading today. I might have been able to make a few more bucks if I waited until later in the week, but with family in town for the holidays, my son off from school for the week, and client accounts to finish trading for the year, I figured entering the limit orders last week would be easier than trying to time the perfect exit point. I don’t even plan to sell replacement orders until next week when we see how the market opens the new year.

This is the order the orders came through, but there was no significance on how I prioritized them. It just worked this way. While QQQ was trading at $120.44, I bought to close one QQQ February $117 naked put for $1.49 and paid $149.67 including $0.67 in commission. I earned a realized gain of $104.65. While IWM was trading at $136.36, I bought to close one IWM February $132 naked put for $2.10 and paid $210.67 including $0.67 in commission. I earned a realized gain of $48.65. While MDY was trading at $304.69, I bought to close one MDY March $305 naked put for $8.50 and paid $850.29 after paying $0.29 in commission. I earned a realized gain of $99.45. While DVY was trading at $89.41, I bought to close one DVY January $87 naked put for $0.35 and paid $35.24 including $0.34 in commission. I earned a realized gain of $129.51. To save you some math, I added $382.26 in total in capital gains. It’s not much, but it’ll be easier on taxes with my divorce coming up to have the gains in 2016.

If the market doesn’t go down before these options would’ve expired and if I don’t replace these positions soon, I wasted $1,245.87. I plan to replace these trades and wanted the profit in 2016, so I don’t think it’ll be a waste. After making these trades, I was left with only holding 100 shares of Disney (DIS) that I have a $1,000 paper loss on, minus the put option premiums I received for the shares assigned a while ago.

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