What a crazy options expiration day today was! I took the opportunity to open four new positions as my old positions expired worthless. The options for September were already available for SPY, GES, NDAQ and EEM and my July options were far (enough) out of the money so I started with those and will catch up with UCO on Monday or Tuesday. I’m still long 1,000 shares of UCO too and plan to sell new covered calls and most likely will do the same thing as my July expiration plays and add some new naked puts also.
Speaking of doing the same, I started with SPY this morning. While SPY was trading at $108.05 I sold one SPY 101.00 naked put at $2.49 and one SPY 112 covered call for $2.41 and I received $487.97 after commissions. My order for the option strangle was for $4.90 and it only took a few minutes for it to hit. I’ve received $13.07 per share in options premiums since I started this series of trades which brings my cost on 100 shares down to $103.93. If I’m assigned another 100 shares at $101 I’ll have to divide my premium intake by 200 instead of 100, but over the long run I think I’m looking very good on this position.
Next I moved on to GES. GES is the biggest dog in my portfolio, but now that it’s this low I hate to let it go, especially while I can bring in such good premiums for out of the money calls. While GES was trading at $33.10 I sold two GES September 35 covered calls at $1.75 and received $348.99 after commissions. This brings my cost down to $40.42 per share. If the shares are called away I’ll lose just under $1,100 on the series of trades, if not I’ll be able to reduce my cost a little more each time I write new covered calls.
NDAQ was next on my hit list. I’m still a long term bull on NDAQ, so as my current July 17 naked puts were set to expire worthless today I went ahead and opened a new position (with one more contract than I had in July) at the same strike. While NDAQ was trading at $17.72 I sold four September 17 naked puts at $0.70 and received $277.14 after commissions.
Finally I got around to EEM with only nine minutes to go in the trading day. Just a couple of days ago EEM was above $40 and I thought my 200 shares would be called away, but it started dipping and I wanted to make sure it didn’t snap back above my covered call strike before I sold a new strangle. While EEM was trading at $38.61 I sold two EEM September 36 naked puts at $1.25 and two EEM September 40 covered calls at $1.43 and received $533.44 after commissions. I started with a limit order at $2.70 for the trade, but saw EEM was coming back up and wanted to make sure I got in before the day closed. I ended up changing my order to a market order and it hit at $2.68. Taking in these premiums brings my cost per share down to $33.10 based on 200 shares. Of course that’ll change if I’m assigned 200 more shares at $36.00, but I’ll detail that in this space if it happens. I changed my strikes with this September strangle. My July strikes were 34/39. I increased the September strikes to 36/40 based on the support/resistance we’ve seen over the past few months. I actually think EEM could be back up to $43 or so before hitting real resistance, but if I can get out at $40 with a cost per share close to $33 I’ll have a hard time complaining. Since I sold new naked puts with this covered call I wanted a bigger premium up front rather than hoping for a rise in the price. I was content to exit at $39.00 today, so getting an extra dollar in September and more premiums today seems like a good thing, assuming EEM stays up.