Below are the actual trades:
The last update on trades had generated $7262 in revenues. I’m approved for “naked” options trading meaning I can sell puts on companies I don’t own and without having the cash to purchase said security. This update shows I’ve generated $26,390 in revenues. The closeout column is what my total profit will look like if I closed out all trades today.
Note: These profits won’t include dividends which I do receive from investing in other dividend paying stocks with the revenue.
My BDX put is killing it, I could close out with nearly a $1300 profit in a short amount of time! The MO puts are killing me though. However, I like Altria for the long-term and if I get assigned shares I’ll be ok with it. I had a couple of speculative calls expire with Teva for a loss of $261.45. However, I earned $449.10 on another 5 calls I bought and then sold on 09/12. Teva remains a large speculative position for me. I don’t see them going bankrupt but I do see shares under pressure until the new CEO can get things going again.
My V puts continue to do well. V is a wonderful company and I believe shares will continue to beat the market for a while. This is why I’ve sold 3 large deep in the money puts for a nice revenue stream. The first two puts would profit about $1500 if I closed them out today.
So what happens in the case that one of these companies is lower near expiration? Well, I have a few options.
a. I can do nothing and I’ll be required to purchase 100 shares of said security at the strike price. It’s sort of like I’m buying the company right now at a discount.
b. I can decide to purchase back the put for more money at a loss of approximately ($71/share – current share value) x 100.
c. Third option is to “roll” the put forward. What this means is that I simultaneously purchase the put back and sell another longer dated put so that I haven’t lost any money.
Well the good news is that I’m in the positive on these trades. This is in my speculative account but I still target mainly dividend paying companies that I want to own or already own anyways. Any profits will go directly into purchasing more shares of solid dividend-paying companies.