I have no actual shares of a stock or ETF right now. All of my equity exposure is through naked puts. None of these puts is in-the-money, but DIS was dead-on at-the-money when I pulled this report and MDY is less than 1% away. I could take assignments on both of those options and not feel like I’m taking a big risk by staying long. The rest of my options give me a decent cushion before assignment. Some have too big of a cushion. I should probably roll my November SPY position higher soon, but I want to wait for Washington D.C. to get past their current battle before I raise any of my strikes. My UWM puts expire in two weeks. It would take a nearly 20% drop in the Russell 2000 for these to be assigned. I don’t see a drop like that as much as a 1% probability and should start adding exposure if the markets fell that quickly anyway. I could buy these UWM puts back for a nickel maybe, but it’s not worth spending $10 on something that I view as worthless and almost risk-free.
My leveraged S&P 500 ETF puts (SSO) are the only ones that could hurt me in a serious sell-off, but I keep thinking (hoping) that politicians are just trying to generate fear right now and that they’ll come to an agreement in the final hour. Once they reach a deal, I expect stocks to resume the bull market’s run. It’s boring, but until there’s a catalyst to move stocks higher, I’m probably going to sit and wait with what I have. I’ll still be 100% invested, even when my UWM puts expire this month. That’s enough risk to hold in a time of uncertainty.
[table caption=”Current Portfolio” width=”600″ colwidth=”20|100|50″ colalign=”center|center|center|center|center|center”]
Description, # contracts, Current Price, strike, Premium sell price per contract, % From Strike
Dec-MDY, -1, $227.11, $225.00, $6.30, 0.94%
Dec-SSO, -2, $84.61, $78.00, $3.20, 8.47%
Dec-SSO, -2, $84.61, $80.00, $3.50, 5.76%
Nov-DIS, -2, $65.00, $65.00, $1.86, 0.00%
Nov-FEZ, -2, $38.79, $36.00, $1.75, 7.75%
Nov-IWM, -3, $106.39, $103.00, $3.26, 3.29%
Nov-SPY, -1, $168.12, $160.00, $3.50, 5.08%
Oct-UWM, -2, $72.61, $52.00, $1.96, 39.63%
[/table]
I’m going in for a simple outpatient surgery on Wednesday for my elbow. I’ll be in a splint for 11 days and doubt I’ll feel like typing much to update trades during that time. I’ll try to get something posted for any changes, but my words might be very brief, especially if I’m typing with one hand.
I always BTC or roll at 5-10 cents with more than a few days remaining. Reduce capital risk or put the money to work where there is more reward. Good luck with your surgery!
Mule
I tried buying them back for the past couple of weeks, but couldn’t get a taker at 5-10 cents. With nine days to go before expiration I’ve given up. I don’t want to roll it yet since I think I’ll get a better price within the next two weeks. I might leave an order in for a high ask to roll, just to see if I can catch a dip.
Thanks for the well wishes. It’s supposed to be a simple surgery.