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Strategies & Market Trends : Option Strategies
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To: Thehammer who wrote (1955)11/30/2018 1:41:40 PM
From: Thehammer1 Recommendation

Recommended By
chris714

  Read Replies (2) of 2591
 
Wanted to post an update to my message on 10/6 that covered my current cash covered put positions. We have been in a pretty negative market during that time frame although it has turned a little more positive in the last week. This was my posted positions from 10/6:

Some of my current shorts:
AGN JAN $200
BA DEC $330
CCI JAN $110
HD JAN $200
HON DEC $150
IONS JAN $50
LMT DEC $310
MCD DEC $170
PH JAN (20) $200
QCOM JAN $62.5
SJM $ OCT $105
WBA JAN $72.50

AGN was assigned early and I am underwater on the position. My Net purchase price (includes all put premiums is $179.00) I tried to roll but there was nothing there for a position this far in the money. If the premiums are less than the dividend....)

BA = still open with a lot of time value. BA has been above and below exercise price. As I write it is almost $10 above exercise price with over $6 in time value and less than a month to go until expiration.

CCI = this position has spent a lot of time ITM but is currently above exercise price $2 out of the money and $2 in time value remains. Waiting until time value gets closer to dividend.

HD = Position was way in the money and Time Value was below dividend. Rolled position out a year. If assigned my net purchase price would be around $180.00

HON = HON has spun out two separate securities GTX and REZI. This option included both of the spinouts (10 GTX 16 REZI). I rolled the position out to JUN w/o the two little boogers and I lowered the exercise price to $145. I rolled while there was still considerable time value left but I wanted to only be short clean HON and I took advantage of the price action to lower the exercise price. Annualized return has been about 8% and net purchase price would be about $119

IONS = The price action has been positive and the stock is well out of the money although with Bio this can change in an instant. Will reevaluate position when time value is less than $.25

LMT = The position is now in the money by about $12 with over $2 in time value and less than a month to go before expiration. Note that it was ex today for a $2.20 dividend. I will wait until closer to expiration to make a decision. However, this is an interesting study. If the price goes up or the VIX declines, my "options" decline. Right now I could roll down to either March or June at a decent credit. At this point, I prefer that the stock stays ITM but not with a big sell off.

MCD = MCD has been hitting all time highs after being ITM and underwater for quite some time. MCD is $17 over strike price and options are trading near my repo price $.25. I may spread it out to March but at the $170 strike it still gets me about 5%. MCD has been volatile and don't want to go over $170 strike in this market and this stock. MCD also shows some of the advantages about having a diversified portfolio. It has done well in a pretty bad market. EDIT: Just rolled to March with $170 strike. I have had 27 trades / roll in MCD since 2011. My net purchase price would be under $110 and have had an annual return of near 6% but this trade will lower that.

PH = Sitting on position well in the monet buy over a year to expiration. Net purchase price would be $103 with 7% annualized return.

QCOM = almost 2 months to go until expiration ITM and about a buck of time value. Will evaluate as time value erodes. QCOM has been above and below strike. Techs got hit hard in sell off especially semi. QCOM has been buying back stock and looking forward to end of legal issues with Apple.

SJM = Had rolled down to 100 strike in October for expiration in January. Stock got hit recently but has bounced quite a bit.

WBA = Stock was below strike for a long time mainly due to concerns with Amazon. Now about $12.00 above expiration with Time Value getting low. May roll soon or may look to something more lucrative. Have been in and out of WBA puts. Timing not always the best but have managed a 6.7% annual return.

Feel free to comment or post questions. With the market volatility may need to look for different opportunities. Generally like to stick with dividend growers.
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