I sold a naked put on Monsanto (MON) in May and should have continued to do the same each time it expired. I thought it would have a bigger pull back than it did and I waited far too long to get back in. Around market close on Friday I entered a limit order to get back in when MON came down some. Of course today, one minute and 30 seconds into the trading session, while MON was trading at 103.19 my order hit and I sold one January 95 naked put (MONMS) and received $219.25 after commissions.
I sold close to the MON’s low of the morning, but I missed the high of the put option by about 20 cents. I don’t see any slowdown for MON in the near future since the economy shouldn’t factor into it as much as other industries. I checked the chart and saw possible support on an up trending line of higher lows around 100 and another around 95. I opted to play it safer with the 95 strike, but the 100 might be worth it for someone ready to take on more risk for a greater return.
With the January expiration only a month and a week away this might be the last January option I sell as I move my focus to February expiry. I’ll continue to put limit orders in place to catch some of these stocks like MON that just take a small dip and return to their bullish walk.