The final monthly options expiration of the year was an easy one for me. I only had two options scheduled for today’s expiration, a covered call on FEZ and a naked put on MDY.
Since today is the ex-dividend date for FEZ, my in the money FEZ December $38 covered call was assigned overnight. I opted not to buy back the call yesterday so I could start over with a new position when I see a better entry point. I ended up with a realized gain of $115.84 from this series of trades that included the original naked put and a couple of covered calls. While I exited my shares $2 lower than I entered, the option premiums made up the difference. Had I been more patient with my covered call, I could’ve done better, but that’s not my trading model. I like to cover my positions when possible to reduce risk, even if I give up some upside potential.
My MDY December $355 naked put will expire worthless as it’s $20 out of the money while I write this on Friday morning. Funny though, I thought I was being a little aggressive when I sold this naked put in September almost at the money. I’ll have a realized gain of $1,049.73 from the single trade when it expires. My plan is to write another naked put on MDY soon, but the mid-cap ETF is up $16, almost 4.5%, since the intraday low earlier this month. I’d like to see a little retracement before I dip my toe back in the water. Also, I’d like to sell a naked put that expires in February, but those contracts aren’t available until Monday. I could end up with a March expiration, but would rather not go out that far on the calendar yet.
My account balance is back over $100,000 by a few hundred dollars and I’d like to keep that cushion through the end of the year. On January 2, I’ll remove any amount over $100,000 and be able to start the year with close to a clean slate. If I can make it through the rest of December above $100,000, I’ll probably roll some of my January options early since there isn’t a lot of time value left in them. I’m waiting until January to push the capital gains into next year. Every little bit of delayed taxes helps.