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
I got assigned on expiration date the following option:
Trade #37: 2 BEN call options strike 30 exp 1/18/19 when the stock traded at 31.49 I got assigned. I had sold this option for a net income of $548.42. The assignment gave me an implied loss of $154. Thus, secured income from this trade was $394.42. Not bad. It gets better as the stock last closed at 29.63, so selling it at 30 was actually good for me, and helped me unload another high dividend payout stock holding.
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
I got assigned on expiration date the following option:
Trade #37: 2 BEN call options strike 30 exp 1/18/19 when the stock traded at 31.49 I got assigned. I had sold this option for a net income of $548.42. The assignment gave me an implied loss of $154. Thus, secured income from this trade was $394.42. Not bad. It gets better as the stock last closed at 29.63, so selling it at 30 was actually good for me, and helped me unload another high dividend payout stock holding.
Expired Options
Lots of options expired this month:
Trade #14: Sold 1 CVS put option strike 55 exp 1/18/19 for $222.21 income: closed at 65.52 out of the money by 19%.
Trade #19: Sold 1 CVS put option strike 55 exp 1/18/19 for $338.90 income: same as above.
Trade #24: Sold 1 CELG put option strike 75 exp 1/18/19 for $609.20 income: closed at 86.27 out of the month by 15%. The takeover bid from BMY pumped up the stock. I will be liquidating it soon as most of the upside has been captured and I don't want to hold BMY stock (too high yield, slow growth).
I did not sell any call options this month.
I did not sell any put options this month.
New Put Options Bought
I sold one put option this month:
Trade #42: Bought 1 PCG put option strike 9 exp 6/21/19 for $285.33: this is to complement the trade #41 above. I paid a total of $491.61 for both a call and put option at 9, betting for an overall profit as long as the stock moves by $5 from either direction before expiration of either option. I considered that highly probable given the event driven volatility of this stock. I have now sold the call option for $519.71, so even if the put option eventually becomes worthless I will have captured a $28.10 gain. I will let the put option ride a bit longer hoping for another drop in the stock to close it more profitably.
Trade #14: Sold 1 CVS put option strike 55 exp 1/18/19 for $222.21 income: closed at 65.52 out of the money by 19%.
Trade #19: Sold 1 CVS put option strike 55 exp 1/18/19 for $338.90 income: same as above.
Trade #24: Sold 1 CELG put option strike 75 exp 1/18/19 for $609.20 income: closed at 86.27 out of the month by 15%. The takeover bid from BMY pumped up the stock. I will be liquidating it soon as most of the upside has been captured and I don't want to hold BMY stock (too high yield, slow growth).
Trade #27: Sold 1 KO call option strike 48 exp 1/18/19 for $77.91 income: closed at 47.61 out of the money by just 0.81% from strike. That was close. I will probably sell the stock soon one way or another as it pays too much dividend and has slow growth.
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 closed the following option this month:
Trade #25: Sold 1 CAH put option strike 47.5 exp 1/18/19 for $398.90 income: I closed it a couple days before expiration when it traded just below strike for a cost of $40.33. The stock embarked on a strong rally this month, but assignment still seemed possible at that point if the stock price were to drop back a bit at option expiration date, and I did not want to risk getting assigned this stock I don't like anymore. Unfortunately, the stock rally continued past the strike price and the option would have expired worthless, so I wasted $40.33. I still secured much of the option income though.
Trade #41: Bought 1 PCG call option strike 9 exp 2/15/19 for $206.28 on 1/14/19 and sold to close it for $519.71 on 1/24/19, securing $313.43 income. On 1/14/19, PCG dropped 50% to trade around $9 on news of plans to file for bankruptcy protection. I figured that the stock will either go much lower, possibly to zero, or it will rebound much higher. So I bought both a call and a put option on the stock near the money, and set limit to sell both at an overall profit. That happened on 1/24/19 when the stock rebounded strongly and I sold the call option at a profit even if the put option were to become worthless.
Trade #25: Sold 1 CAH put option strike 47.5 exp 1/18/19 for $398.90 income: I closed it a couple days before expiration when it traded just below strike for a cost of $40.33. The stock embarked on a strong rally this month, but assignment still seemed possible at that point if the stock price were to drop back a bit at option expiration date, and I did not want to risk getting assigned this stock I don't like anymore. Unfortunately, the stock rally continued past the strike price and the option would have expired worthless, so I wasted $40.33. I still secured much of the option income though.
Trade #41: Bought 1 PCG call option strike 9 exp 2/15/19 for $206.28 on 1/14/19 and sold to close it for $519.71 on 1/24/19, securing $313.43 income. On 1/14/19, PCG dropped 50% to trade around $9 on news of plans to file for bankruptcy protection. I figured that the stock will either go much lower, possibly to zero, or it will rebound much higher. So I bought both a call and a put option on the stock near the money, and set limit to sell both at an overall profit. That happened on 1/24/19 when the stock rebounded strongly and I sold the call option at a profit even if the put option were to become worthless.
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 this month.
New Call 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 call options this month.
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 put options this month.
New Put Options Bought
Buying put options is a way to speculate a stock might plunge without risking too much money. Unlike short selling, where there is no limit on the amount of money one could lose, the maximum amount one could lose by selling put options is limited to the option premium.
I sold one put option this month:
Trade #42: Bought 1 PCG put option strike 9 exp 6/21/19 for $285.33: this is to complement the trade #41 above. I paid a total of $491.61 for both a call and put option at 9, betting for an overall profit as long as the stock moves by $5 from either direction before expiration of either option. I considered that highly probable given the event driven volatility of this stock. I have now sold the call option for $519.71, so even if the put option eventually becomes worthless I will have captured a $28.10 gain. I will let the put option ride a bit longer hoping for another drop in the stock to close it more profitably.
Options Expiring Next Month
I have no options expiring in February.
Cumulative Options Income Summary
As of January 2019:
Cumulative Cumulative Secured
Options Income Options Income
This Month: $ 11,880.63 $ 2,070.48
Last Month: $ 11,360.63 $ (244.16)
Difference: $ 520.00 $ 2,314.64
Below is a monthly tracker showing my cumulative total and secured options income. Due to the strong stock market rebound and my bullish positioning, I saw a strong rebound in my cumulative secured income erasing all the losses from the prior month. It is now going in the right direction.
As of January 2019:
Cumulative Cumulative Secured
Options Income Options Income
This Month: $ 11,880.63 $ 2,070.48
Last Month: $ 11,360.63 $ (244.16)
Difference: $ 520.00 $ 2,314.64
Below is a monthly tracker showing my cumulative total and secured options income. Due to the strong stock market rebound and my bullish positioning, I saw a strong rebound in my cumulative secured income erasing all the losses from the prior month. It is now going in the right direction.
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