Options Expiration – March 2018

My March options were mixed. I took an early assignment on my WMT naked put as I wrote about yesterday. I’ll also take an assignment on my XLB March $63 naked put. In the positive column, I’ll take a full profit on my GS March $265 naked put to give me a realized gain of $589.31. GS closed today at $267.60 compared to being at $271.34 when I sold the put at the end of January. I always love these trades when the stock falls and yet I make a full profit from the out of the money option. Another profitable trade was on TLT. I had a TLT call spread using the $125 short call and $128 long call for strikes. TLT was trading at $123.82 when I sold this combination and finished today at $119.82. My realized gain is only $157.56, but I didn’t pull any money to the side to cover this trade. To me, that makes it feel like I just earned an extra $157.56 for a very low risk position. My third profitable trade was on IWM. My one IWM March $159 naked put was in the money, but less than the $3.20 premium I received.

Since IWM wasn’t far below my strike, it allowed me to roll the contract in a calendar spread from March to May while keeping the same strike. While IWM was trading at $158.11, I bought to close one IWM March $159 naked put for $0.91 and sold to open one IWM May $159 naked put for $4.35. I received $342.75 net for the calendar spread. My realized gain is $227.70 for the March put. If this trade works for me through May, I’ll earn 2.81% or 16.05% annualized. IWM can drop 2.18% before I take a loss.

I didn’t have to buy back my GS March $165 naked put since it expired worthless, but while GS was trading at $269.00, I sold one GS May $265 naked put for $3.44 and received $342.75 after paying $1.25 in commission. If GS remains above $265 at the May expiration, I’ll earn 3.05% or 17.43% annualized. GS can lose 4.40% before I lose any money on this new trade.

WMT gained more than $1.50 today, so I opted to stay in the shares. I still plan to dump them eventually, but it wasn’t today. I’m waiting for the May option expiration contracts to be available next week before selling a covered call on XLB and will consider selling another out of the money naked put on it too.



« « WMT Option Assigned - | - Sold FB Naked Put » »


* 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.

Leave a comment

Have some thoughts about this post? Leave a comment to voice your opinion. If your comment is nondescript, I might think it's spam and delete it. While I appreciate all comments, I hate spam.

(required)

(required)