Options Update – January 2018

Well, the markets are on a tear. This has helped my puts become more profitable. I continue selling puts against companies I want to own more of and using proceeds to purchase more shares of these companies.

Below are all my trades since July of last year:

Date	Action	Ticker	Expiration	Strike	Call/Put	Qty	Price	Net	close Price	closeout	Days to Exp
7/6/2017	Sell	MO	1/18/2019	90	Put	1	$19.00	$1,894.55	28.5	-$955.45	357
7/6/2017	Sell	MO	9/21/2018	75	Call	1	$5.15	$509.55			x
8/11/2017	BTC	MO	9/21/2018	75	Call	1	-$2.12	-$217.45		$292.10	x
7/6/2017	Sell	BDX	1/19/2018	210	Put	1	$18.00	$1,794.55			x
12/1/2017	BTC	BDX	1/19/2018	210	Put	1	-$1.38	-$143.45		$1,651.10	x
7/6/2017	Sell	MDT	6/15/2018	97.5	Put	1	$11.25	$1,119.55	11.25	-$5.45	140
7/6/2017	Sell	JNJ	6/15/2018	150	Put	1	$19.50	$1,944.55	9.05	$1,039.55	140
7/20/2017	Sell	V	6/15/2018	115	Put	1	$17.50	$1,744.55	2.82	$1,462.55	140
7/20/2017	Sell	V	1/18/2019	130	Put	1	$31.75	$3,169.55	12.65	$1,904.55	357
8/10/2017	Sell	ESV	1/18/2019	15	Put	2	$10.50	$2,094.55	8.24	$446.55	357
8/9/2017	Sell	Teva	1/18/2019	37.5	Put	1	$19.30	$1,924.55			x
1/18/2018	BTC	Teva	1/18/2019	37.5	Put	1	-$17.00	-$1,705.45		$219.10	x
8/9/2017	Sell	Teva	1/18/2019	30	Put	1	$12.20	$1,214.55	9.65	$249.55	357
8/10/2017	Bought	Teva	9/1/2017	17	Call	2	-$1.28	-$261.45		-$261.45	x
8/10/2017	Bought	Teva	9/15/2017	17.5	Call	5	-$1.37	-$690.45			x
9/12/2017	STC	Teva	9/15/2017	17.5	Call	5	$2.29	$1,139.55	2.29	$449.10	x
8/8/2017	Sell	GIS	1/18/2019	67.5	Put	1	$12.30	$1,224.55	11.2	$104.55	357
10/19/2017	Sell	GIS	1/18/2019	67.5	Put	1	$16.90	$1,684.55	11.2	$564.55	357
8/2/2017	Sell	MO	9/21/2018	80	Put	1	$17.50	$1,744.55	11.75	$569.55	238
9/7/2017	Sell	MO	1/18/2019	90	Put	1	$28.50	$2,844.55	28.5	-$5.45	357
10/17/2017	Sell	V	12/20/2019	160	Put	1	$52.52	$5,246.55	48	$446.55	693
10/25/2017	Sell	T	9/21/2018	40	Put	2	$7.30	$1,454.55	4.7	$514.55	238
10/26/2017	Sell	BBL	6/15/2018	35	Put	1	$2.55	$249.55	0.4	$209.55	140
10/30/2017	Sell	CVS	1/19/2018	80	Put	1	$11.90	$1,184.55			x
1/8/2018	BTC	CVS	1/19/2018	80	Put	1	-$2.40	-$245.45		$939.10	x
12/11/2017	Sell	CVS	1/18/2019	77.5	Put	1	$10.42	$1,036.55	5.41	$495.55	357
1/8/2018	Sell	CVS	5/18/2018	82.5	Put	1	$7.30	$724.55	4.45	$279.55	112
10/31/2017	Sell	OHI	6/15/2018	29	Put	1	$2.50	$244.55			x
12/18/2017	BTC	OHI	6/15/2018	29	Put	1	-$2.45	-$250.45		-$5.90	x
11/13/2017	Sell	HBI	1/18/2019	20	Put	1	$3.00	$294.55	1.45	$149.55	357
11/14/2017	Sell	WMT	3/16/2018	100	Put	1	$10.85	$1,079.55	4.95	$584.55	49
12/01/17	Sell	BDX	3/16/2018	230	Put	1	$10.93	$1,087.55	2.9	$797.55	49
12/01/17	Sell	Teva	1/18/2019	32.5	Put	3	$17.20	$5,154.55	12	$1,554.55	357
12/11/17	Sell	RDSB	7/20/2018	60	Call	1	$6.34	$628.55	12	-$571.45	175
12/15/17	Sell	PG	9/21/2018	92.5	Put	1	$5.20	$514.55	6.6	-$145.45	238
12/15/17	Sell	GE	9/21/2018	18	Put	3	$1.64	$486.55	2.55	-$278.45	238
12/15/17	Sell	CHD	7/20/2018	50	Call	1	$2.78	$272.55	3.2	-$47.45	175
12/28/17	Sell	SO	8/17/2018	48	Put	1	$2.75	$269.55	5.13	-$243.45	203
12/28/17	Sell	SO	1/18/2019	50	Put	1	$4.75	$469.55	7.7	-$300.45	357
01/08/18	Sell	WSM	8/17/2018	57.5	Put	1	$7.70	$764.55	7.3	$34.55	203
01/18/18	Sell	BGS	8/17/2018	30	Put	1	$2.50	$244.55	2.21	$23.55	203
1/18/18	Sell	BGS	8/17/2018	35	Call	1	$1.82	$176.55	0	$176.55	203
1/19	Sell	IBM	9/21/2018	170	Put	1	$15.65	$1,559.55	13.75	$184.55	238
1/23/18	Sell	OHI	1/18/2019	30	Call	5	$0.70	$344.55	0	$344.55	357
TOTALS								$46,022.20		$12,867.20

The last update on trades had generated $43,419 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. My collateral is owning shares of companies as equity to cover. This update shows I’ve now generated $46,022 in revenues. About $40,000 of that has already been used to purchase more dividend paying stocks. The closeout column is what my total profit will look like if I closed out all trades today. It’s up to over $12,000 from about $10k in the last update. The difference in the revenues and profits is what it would cost me to close out all the trades, about $33,000, same as last time. I’ve only got a couple of puts expiring in the next couple of months, WMT and BDX. Both are looking to expire worthless at this point meaning I would keep all the premiums(in this case over $2,000).

Note: These profits won’t include dividends which I do receive from investing in other dividend paying stocks with the revenue.

Since last month I’ve only made a few trades. A lot of this is due to the way E*Trade is now looking at maintenance requirements. I haven’t figured out their new formulas yet but I may look for another avenue to start options trading since it doesn’t seem consistent anymore.

Unpacking the complexities of trading can often seem confusing. However, it does not have to be this way. You can find some simple investment tips and tricks, as well as an overview of some of the most popular trading options for young people on the Learn to Trade website. Correspondingly, keeping up to date with the latest trading news and techniques is crucial if you want to create a successful investment portfolio.

I purchased 100 shares of BGS and simultaneously sold a call and put. I also sold some OHI calls since I see shares depressed for a while. This extra income will be a nice boost. If shares are called away at $30 , I’d received $30.70 total which is higher than my basis so I’m ok with that. I also closed out a $37.50 Teva put while shares have been on a run, that cost me $1700 for a profit of $219.

My V puts continue to be rock solid. The stock just continues to go up no matter what. 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. I’d profit over $3500 from V if I closed the 3 puts I have outstanding. I’ll probably put these profits directly into buying more V shares. I don’t mind going overweight this wonderful company.

So what happens in the case that one of these companies is lower near expiration (in the money)? 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 (strike – 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.

Any profits will go directly into purchasing more shares of solid dividend-paying companies.

This is just another avenue I’m using to earn additional profits so that I can get this dividend snowball moving faster. I’m still targeting my next goal of $12,000 ($1,000 a month) in forward dividends by end March. My forward dividends are currently $11,197, up from $10,826 last month. I’ll need to put to work about $27,000 at a 3% yield in the next couple of months. With tax season coming up this might post a challenge but I love challenges. Wish me luck!