I have 10 options expiring today – seven puts and three calls. All 10 will finish above their strikes today which means I won’t be assigned any of the puts and all three covered calls will force the sale of my shares at the strike prices. Here’s the breakdown on each one:
- CSX – 1 naked put at $57.50 – It has had a great run and started a nice little correction this week. I’d like to see it stop falling and then I might sell another naked put on it. I don’t think the fall has much farther to go and might jump on the March calls once they are posted on Monday.
- EEM – 1 naked put at$43.00 – I’m considering an EEM longer term put and if I don’t go long I’ll probably add one more naked put two months out. EEM found good support this today at the low from last week. If that area around $46.60 doesn’t hold I could see $46.00 and then $44.50 as the next potential areas of support. I’m going to wait this one out a little before making my move.
- IWM – 1 naked put at$76.00 – Small caps are also part of the recent correction. I’m not sure where it’s going to land before turning north again, but will be watching the 50 day moving average which is fairly close by to see what support it can offer. I might not sell another IWM put, but instead go with another long term UWM put once I think I’ve found a good entry point.
- JPM – 1 naked put at$39.00 – Goes with the covered call below.
- MDY – 1 naked put at$160.00 – I want to see if mid-cap stocks correct a little more before getting in again. When I decide to get in again I’ll probably do it with MVV August options to try to help smooth out some of the bumps between here and there.
- MS – 1 naked put at$23.00 – Goes with covered call below.
- VWO – 1 naked put at$46.00 – I might go back to EEM for future option selling unless I can get someone to buy on the high side of the wide bid/ask spread that comes with VWO.
- JPM – 100 shares and one covered call, will be forced to sell at $39.00 – Wash rule will keep me out for 30 days. I’m ending this series of trades with a profit of $241.69. That’s actually not bad since when I sold the naked puts that earned me the shares JPM was trading at $48.12, $3.00 more than where it is while I’m writing this.
- MS – 100 shares and one covered call, will be forced to sell at$27.00 – Wash rule will keep me out for 30 days. I’ll end this series of trades with a profit of $354.16. MS was trading at $30.14 when I opened this position with naked puts last April. Right now it’s at $30.10. It’s a small profit to take, but one I wouldn’t have if I hadn’t used options.
- UCO – 1,000 shares and ten covered calls, will be forced to sell at$10.00 – Wash rule will keep me out for 30 days. This was a great ride for me and I plan to revisit it after my wash rule restriction has passed. I’ll finish with a profit of $3,413.04 for the series of trades. The best part of this is the price change in UCO. UCO was trading at $13.03 when I opened the first leg of my option spread over 10 months ago. Right now it’s trading at $11.65. It’s hard not to love making $3.41 per share when the underlying stock fell $1.38 per share. With the retreat oil started this week I might be able to get back in at a great point next month. If it goes higher I’ll buy a put spread again. If anything, UCO is volatile.
I should’ve mentioned it my post yesterday, as of yesterday all trades on January 2012 options that go all the way to expiration will fall into short term capital gains since yesterday was exactly a year away from next January expiration. You need a year and a day to make it long term capital gains.