January has been even worse than most bears expected. I’ve been in the camp that we’re oversold and the mass selling should subside sooner than later. Apparently, we aren’t there yet. I regret not adding more long puts like I planned to do after closing my last ones for a profit. I also regret being overly bullish (cocky?) on my Disney (DIS) predictions.
My only option expiring today is one DIS January $115 naked put. I’ll be assigned 100 shares with DIS below $95. My cost per share will be $112.01 after deducting the premiums I received. I’d like to add more DIS, but I’m trying to stick to my rules of not catching a falling knife. I thought DIS would’ve bottomed well before it got this low again and I’ve been wrong. It will hit a turning point and I’ll have to decide at that point if I still like it enough to sell another naked put.
I’m not selling covered calls on any of my positions yet. I expect a sharp snap back whenever the sentiment shifts. I should’ve had covered calls in place coming into the year, but since I didn’t, I don’t want to cut my upside potential yet.