I had two legs of options on TLT that expired worthless today. Both gave me a full profit. My two TLT August $170 naked calls finished with a realized gain of $403.36. My five TLT August $145 covered puts brought in $320.55 when I sold them, but I paid $190.90 in dividends in July and August on top of the $39.34 in short interest I paid. The net total gave me a realized gain of $90.31 on these puts.
I didn’t sell the puts with a focus on bringing in another profit stream, but instead was only trying to cover my costs of holding the short position. So, the puts did what I hoped and left the door open to profits if TLT had fallen quickly as I expected. Eventually, TLT will fall again. The trick will be if I can maintain the position long enough to make it work out for me the way I’ve planned.
I already sold five replacement puts for October at the $155 strike as I noted two weeks ago. I also sold three October $170 naked calls that I rolled from my original five August $170 calls. I have a limit order to sell two more naked calls if TLT continues on its bounce up from the lows seen last week. TLT has acted like it found its legs and might run back up towards $170 yet again. Today’s trading pulled the ETF above its 10, 50, and 100-day moving averages. I don’t want to get in too deep yet, but also don’t want to miss the opportunity to sell more calls at elevated premiums.