Options Update: August 2018

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

No option was assigned in August.

Expired Options

Three options expired worthless in August:

Trade #11: Sold 1 AYI 180817P00120000 (put option on AYI strike 120 exp 08/17/18) for $358.90 income after fees. - Closed at 143.69, 19.74% above strike.

Trade #12: Sold 1 SRCL 180817P00055000 (put option on SRCL strike 55 exp 08/17/18) for $259.70 income after fees. - Closed at 61.42, 11.67% above strike.

Trade #13: Sold 1 CVS 180817P00060000 (put option on CVS strike 60 exp 08/17/18) for $198.91 income after fees. - Closed at 73.68, 22.80% above strike.

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 August.

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 August.

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 sold two new call option in August:

Trade #26: Sold 2 GPS 180928C00032000 for $258.42 income after fees. - Dividend yield is too high. I want to sell it to reduce tax liabilities.

Trade #27: Sold 1 KO 190118C00048000 for $77.91 income after fees. - Dividend yield is too high. I want to sell it to reduce tax liabilities.

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 August.

Options Expiring Next Month

Three options expire next month:

Trade #15: Sold 1 SQQQ 180921C00020000 for $219.66 income after fees. - Out the money with 44.45% margin of safety and trading at 0.0005. This is extremely unlikely to get assigned.

Trade #17: Sold 1 SQQQ 180921C00020000 for $239.65 income after fees. - Out the money with a wide 44.45% margin of safety and trading at 0.0005. This is extremely unlikely to get assigned.

Trade #22: Sold 1 SQQQ 180921C00022000 for $283.90 income after fees. - Out the money with a wide 49.50% margin of safety and trading at 0.0001. This is extremely unlikely to get assigned.

Trade #26: Sold 2 GPS 180928C00032000 for $258.42 income after fees. - Out the money with a narrow 5.16% margin of safety and trading at 0.3952. This may or may not get assigned. If it did, I would probably put the proceeds into low or zero yield growth stock(s). If not, I would likely keep selling calls on it.

Cumulative Options Income Summary

As of August 2018:

                             Cumulative      Cumulative Secured
                          Options Income   Options Income
                                             
This Month:           $  4,892.04              $   531.44
Last Month:           $  4,555.71              $  (286.07)
Difference:             $    336.33              $    817.51

Below is a monthly tracker showing my cumulative total and secured options income. Secured income running total got back above zero. Good.

Thanks for reading!