Closed ADI Naked Put

I have a meeting on Monday morning and thought I’d be smart to place an order this afternoon before I forgot in the hopes it might hit next week if ADI’s price improved a lot. Instead, stocks had a strong afternoon and ADI moved higher with the tide. While ADI was trading at $89.48, I bought to close my one ADI March $85 naked put for $0.60 and paid $60.24 including $0.24 in commission. The bid/ask was somewhere around $0.68/0.70 when I placed my order and really didn’t think it would hit today. At first, I was kind of bummed because I was hoping the order would trigger due to time value decay more than price improvement. Had that been the case, I would’ve been able to sell another naked put soon after and take advantage of the lower stock price. As it played out, I was away from my desk when the order went through around 3:34 pm and didn’t even see I had bought it until after 4:00.

I’ll probably get back into ADI, but I will look around to see if something else looks more appealing. The good news is I made a realized gain of $239.51 and have an extra $8,500 available to work with in a volatile market. I don’t mind spending more than $8,500 for a stock I like and risking being on margin a few hundred or even a few thousand dollars. Most likely, I’ll enter a limit order to see if I can catch ADI or something else on a dip. It’s much more fun and profitable (which is why it’s fun) to sell naked puts when a stock dips, but if I run this route, I could miss getting my trade to hit at all.

I added another limit order today to double my position on my five UUP long puts. The order is for only five more shares at $0.09, but it could help me turn a losing position back into a profitable position or it could just be throwing away $50. I haven’t placed an order on to close my NFLX or AAPL April naked puts yet, but since I have such a good profit so far, I might get to it next week and move into some May puts. Both NFLX and AAPL have May puts available already. So, if nothing else, I could enter a calendar spread to hit if they drop and volatility increases.

I’m still hanging onto my WMT naked put that will probably be assigned next week before its ex-dividend date of March 8. I’m down big on it, over $1,000 and might just take my lumps early. The out of the money covered calls don’t look too sweet right now, which means I don’t have a big incentive to stick around if the sentiment on it doesn’t seem ready to improve soon.

« « Month End Summary – February 2018 - | - WMT Option Assigned » »

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