Sold QQQ and AAPL Naked Puts

I’ve regretted not being invested in AAPL with every dollar it pushed higher for the past few months, but I stayed out with the expectation that it’d have a pull back offering a better opportunity. After missing the June and July mini-dips, I decided the stock was worth some risk because I expect any new dip, or even correction, to be short-lived. Finally, I made another trade on an Apple option to give me some exposure today. While AAPL was trading at $160.56, I sold one AAPL October $160 naked put for $5.50 and received $549.31 after paying $0.69 in commission.

The Apple trade worked in a funny way for me today because I entered the order when this October $160 put had a bid/ask of around $4.70-4.80. I entered my order for $5.20, but apparently forgot to hit the Transmit button. I moved on and entered a limit order for a QQQ option too and remembered to hit Transmit on it. A couple of hours later, after being away from my desk for a while, I saw the QQQ order hit. While QQQ was trading at $144.24, I sold one QQQ October $142 naked put for $2.80 and received $279.32 after paying $0.68 in commission. I couldn’t believe my AAPL order hadn’t hit when the stock had dropped $1.50 or more from when I entered the order. That’s when I looked to see I didn’t transmit it. By then, the option contract was trading around $5.50-5.60, so I checked the news and chart again before changing my limit order to $5.50 and actually transmitting it. The bid/ask had fallen to $5.20/5.30 by then, so I took a risk of my order not hitting. It did hit as AAPL continued to fall another $0.41 and the contract hit a high of $5.71 for the day. While I didn’t get the high trade of the day, I did bring in an extra $30 that I hadn’t planned to, so that’s a good thing.

My risk with both of these trades going through on the same day is that AAPL makes up 11% of QQQ. If something odd happens to AAPL, QQQ will get dragged down a bit with it. I’m targeting a good reward for the risk in AAPL with a 3.55% potential gain, 17.6% annualized while being able to take a drop in AAPL of 3.77% before I take any cut into my profit. I don’t have quite the cushion on my QQQ naked put at 3.49%, but the risk isn’t all on a single stock either. My potential gain is a good bit less too. I could make 2.01%, only 9.93% annualized.

You can see my YouTube trade videos here:



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