I decided I wanted some Vodafone (VOD) shares to compliment my shares of Verizon (VZ) in my portfolio but at a cheaper price so I sold puts this morning. I Sold a Vodafone (VOD) July 21 ’12 Put at $27 for $145 before commissions. I don’t mind if these get assigned, as it will be the same as if I bought 100 shares for around $25.55/share before commissions.
To me this is a win/win. I get a stock I want at a cheaper price or I collect $145 to wait 3 months.
I also closed out the Taiwan Semiconductor (TSM) June 16 Puts for a profit of $154.
Open:
01/23/12 Sold 1 KMI June 16 ’12 $30 Put @ 2.25
03/12/12 Sold 1 AZN Oct 20 ’12 $45 Put @ 3.00
03/28/12 Sold 3 BBVA July ’21 ’12 $7 Puts @ .55
04/09/12 Sold 1 VOD July 21 ’12 $27 Put @ 1.45
Closed Out:
01/19/12 Sold 2 TSM July 21 ’12 $15 Puts @ 1.80
04/09/12 Bought to Close 2 TSM July 21 ’12 $15 Puts @ 1.03
Profit: $154 before brokerage fees
01/03 – Sold 1 RIG $35 May 19 ’12 PUT @ 2.11
03/12 – Bought to Close 1 RIG $35 May 19 ’12 Put @ .09
Profit: $202.00 before brokerage fees
01/06 Bought 10 SLV Jan 19 ’13 $45 Calls @ 1.05
01/26 – Sold to Close 5 SLV Jan 19 ’13 $45 Calls @ 1.85
02/28 – Sold to Close 5 SLV Jan 19 ’13 $45 Calls @ 2.03
Profit: $890 before brokerage fees
Looks like selling puts has worked out well for you so far, I’ve never tried it. I’ve written covered calls a few times and that has worked out well for me. It’s not really something I focus on, but in times of high volatility premiums go up which can be profitable.
Unfortunately I do not own many shares of any particular stock so transaction fees kill me with covered calls. If it wasn’t for commissions I’d play around with options more. It looks like it would have less of an effect with puts.
Nice blog you have here.
Thanks CI,
I discovered options a couple of years ago. I have a level 3 options account with ETrade for writing naked calls and puts. My favorite strategy is to sell out of the money puts on companies that I want to buy at a cheaper price. I started doing this last fall. Since the market kept going up I wouldn’t get assigned the stock so I kept getting paid to wait. I got some nice premiums on WM and GE. However, I may have done better just buying them outright and selling them after a nice gain. This is always the risk.
The thing is that I don’t care much about the capital gains, I care more about the income produced from the investment so the strategy works well. As you mention, brokerage fees can eat into profits. I prefer selling puts on a big down day to get a better premium. I have the feeling that some of the puts I am writing now may get assigned as the market corrects. I’m trying to only sell them on companies I actually want to own. We shall see. Either way it’s brought in some decent income while I wait for better prices.