Tuesday, October 1, 2019

Options Update: September 2019

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 did not get assigned any options this month.



Expired Options

No option expired this month.

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 close one option this month:

Trade #44: Sold 1 BIDU call option strike 115 exp 9/20/19 for $923.89 net premium: I closed the option on expiration date at $8, paying $801.09 including commissions of $1.09, securing $122.80 options income. Note that this option got deep in the money trading at $107, but I still came out with a small profit by capturing the time premium, which more than offset the intrinsic value.

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 sold one put option this month:

Trade #48: Sold 1 BIDU call option strike 105 exp 3/20/20 for $899.37 net premium: I am still bullish on BIDU and feel that it should rebound, hopefully by the time the option expires. Unfortunately, BIDU continued to drift downward from $107 when I sold this put option to $101 today, so I am showing a paper loss so far.

Options Expiring Next Month

One option will expire in October:

Trade #47: Sold 1 CPRI put option strike 30 exp 10/18/19 for $148.90 net premium: current price 31.57 out of the money 5.23% from strike. Assignment is unlikely but possible.

Cumulative Options Income Summary

As of September 2019:

                             Cumulative      Cumulative Secured
                          Options Income   Options Income
                   
This Month:           $ 15,825.15            $   3,726.05
Last Month:           $ 14,925.78            $   3,603.25
Difference:             $      899.37            $      122.80

Below is a monthly tracker showing my cumulative total and secured options income. Things are heading in the right direction.

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