As I mentioned yesterday in my post, I planned to sell an IWM naked put if the priced dropped a little today. The price didn’t drop and I wrote the put anyway. I decided the employment data and the bullish crossover of the 10-day moving average over the 20-day moving average was enough of a reason to make the trade, especially since I’m still under 50% invested, even after this trade.
While IWM was trading at $136.60, I sold one IWM March $135 naked put for $2.31 and received $229.90 after paying $1.10 in commission. I opted to sell the March put versus the April put for a better annualized gain and because I figured I should sell the closer expiration first and spread out some of my next trades farther out on the calendar. By mid to late next week, when I expect to get around to another trade, the March puts will only be about five or five and a half weeks out and won’t bring in the premiums I’d like for the risk.
You can see me walk through the trade in this video.