Welcome to my monthly options update!
Here, I shall write monthly options update articles to keep track of options trades in my portfolio. Each options update serves as a status report on the open options and the obligations I have. A running tally of all my options trades and income to date are found on the Options page.
Assigned Options
One option got assigned in June:
Trade #23: Sold call option on EXC strike 41 exp 06/15/18 for $63.91 income after fees.
The stock was trading close to strike and had a rally on the last day to close at 41.49, dealing me an assignment. An implied loss from this trade is $49, the amount of the option in the money times 100. Still net $63.91-$49.00 = $14.91. Unfortunately, EXC has continued to rally after that and the latest closing price is $42.60.
This is certainly not my best options trade and it illustrates the danger of selling call options for income by giving up much of the upside potential of a stock. Of course, hindsight is 20/20. Without the benefit of hindsight, I was happy to reduce my position in EXC, a high yield, low growth stock, in exchange for better opportunities elsewhere.
Expired Options
Here, I shall write monthly options update articles to keep track of options trades in my portfolio. Each options update serves as a status report on the open options and the obligations I have. A running tally of all my options trades and income to date are found on the Options page.
Assigned Options
One option got assigned in June:
Trade #23: Sold call option on EXC strike 41 exp 06/15/18 for $63.91 income after fees.
The stock was trading close to strike and had a rally on the last day to close at 41.49, dealing me an assignment. An implied loss from this trade is $49, the amount of the option in the money times 100. Still net $63.91-$49.00 = $14.91. Unfortunately, EXC has continued to rally after that and the latest closing price is $42.60.
This is certainly not my best options trade and it illustrates the danger of selling call options for income by giving up much of the upside potential of a stock. Of course, hindsight is 20/20. Without the benefit of hindsight, I was happy to reduce my position in EXC, a high yield, low growth stock, in exchange for better opportunities elsewhere.
Expired Options
No options expired worthless in June.
Closed Options
When an out of the money option goes further out of the money, one may close the option early and secure most of the options income.
I did not close any options early in June.
Rolled Options
An option can be rolled forward by buying back an option and selling another option with a later expiration date. Rolling is done to avoid options assignment for in the money options.
I did not roll any options in June.
New Calls Options Sold
Selling calls is a way to earn premiums from time decay on securities that are unlikely to reach a certain strike price within a certain time frame. This is best done on stocks you already own so as to limit liabilities should the underlying security shoot to the moon.
I did not sell any new call options in June.
New Put Options Sold
Selling put options is a way to earn premium for agreeing to buy a stock at a given price for a period of time. This is best done with high quality, buy and hold stocks that have limited downside.
I did not sell any new put options in June.
Options Expiring Next Month
Two option expires next month:
Trade #10: Sold call option on HSIC strike 55 exp 07/20/18 for $74.75 income after fees. - Out the money with a wide 32% margin of safety. This is highly unlikely to get assigned, as reflected in the current price of the option $0.0002. I had no idea option price could go to that many decimal places.
Trade #16: Sold call option on MAT strike 12 exp 07/20/18 for $108.91 income after fees. - Out the money with a wide 37% margin of safety. This is also highly unlikely to get assigned, as reflected in the current price of the option $0.0038. Apparently the market thinks this is far more likely to get assigned than the HSIC option above. Interesting. I suppose MAT is a more volatile stock.
Trade #10: Sold call option on HSIC strike 55 exp 07/20/18 for $74.75 income after fees. - Out the money with a wide 32% margin of safety. This is highly unlikely to get assigned, as reflected in the current price of the option $0.0002. I had no idea option price could go to that many decimal places.
Trade #16: Sold call option on MAT strike 12 exp 07/20/18 for $108.91 income after fees. - Out the money with a wide 37% margin of safety. This is also highly unlikely to get assigned, as reflected in the current price of the option $0.0038. Apparently the market thinks this is far more likely to get assigned than the HSIC option above. Interesting. I suppose MAT is a more volatile stock.
Cumulative Options Income Summary
As of June 2018:
Cumulative Cumulative Secured
Options Income Options Income
This Month: $ 4,156.81 $ (469.73)
Last Month: $ 4,156.81 $ (484.64)
Difference: $ 0 $ 14.91
Below is a monthly tracker showing my cumulative total and secured options income. I have sold a lot options for income but so far have not done a great job securing the income. In May I rolled over a CELG put option that went against me, which dealt my cumulative secured income a blow to the tune of -$1,059.89. In June I got an option assignment, which secured me only $14.91 out of a potential total income of $63.91, as explained above. Most of my current options holdings are showing an unrealised profit right now, so hopefully most of them will expire worthless and give me more secured options income down the road.
Thanks for reading!
As of June 2018:
Cumulative Cumulative Secured
Options Income Options Income
This Month: $ 4,156.81 $ (469.73)
Last Month: $ 4,156.81 $ (484.64)
Difference: $ 0 $ 14.91
Below is a monthly tracker showing my cumulative total and secured options income. I have sold a lot options for income but so far have not done a great job securing the income. In May I rolled over a CELG put option that went against me, which dealt my cumulative secured income a blow to the tune of -$1,059.89. In June I got an option assignment, which secured me only $14.91 out of a potential total income of $63.91, as explained above. Most of my current options holdings are showing an unrealised profit right now, so hopefully most of them will expire worthless and give me more secured options income down the road.
Thanks for reading!
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