Options Update: December 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

2 options expired worthless this month:

Trade #45: Sold 1 BIDU put option strike 110 exp 12/20/19 for $973.18 net premium: I made this trade back in May after BIDU sold off to around 114 after the company reported disappointing earnings results. The stock closed at 127.49, 15.90% from strike.

Trade #46: Sold 1 BIDU put option strike 110 exp 12/20/19 for $999.18 net premium: I made this trade back in May after BIDU sold off to around 113 the day after I made Trade #45 above. The stock closed at 127.49, 15.90% from 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 this month.

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. 

Options Expiring Next Month

3 options will expire next month:

Trade #7: Sold 1 AAP put option strike 90 exp 1/17/20 for $1079.63 net premium: the stock currently trades at 159.58, 77.31% out of the money from strike. Assignment is extremely unlikely.

Trade #36: Sold 1 CELG put option strike 70 exp 1/17/20 for $848.90 net premium: CELG has been acquired by BMY by a significant premium since I sold the put option. Assignment is extremely unlikely.

Trade #38: Sold 1 CELG put option strike 70 exp 1/17/20 for $923.90 net premium: CELG has been acquired by BMY by a significant premium since I sold the put option. Assignment is extremely unlikely.

Cumulative Options Income Summary

As of December 2019:

                             Cumulative      Cumulative Secured
                          Options Income    Options Income
               
This Month:           $ 16,074.05            $   5,847.31
Last Month:           $ 16,074.05            $   3,874.95
Difference:             $          0.00            $  1,972.36

Options income is trending up, helped by a strong bull market causing values of put options to plummet.