Sunday, February 2, 2020

Options Update: January 2020

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

3 options expired worthless this month:

Trade #7: Sold 1 AAP put option strike 90 exp 1/17/20 for $1079.63 net premium: the stock closed at 151.05 at expiration, well above strike.

Trade #36: Sold 1 CELG put option strike 70 exp 1/17/20 for $848.90 net premium.

Trade #38: Sold 1 CELG put option strike 70 exp 1/17/20 for $923.90 net premium.


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

No option will expire next month.

Cumulative Options Income Summary

As of January 2020:

                             Cumulative      Cumulative Secured
                          Options Income    Options Income
             
This Month:           $ 16,074.05            $   8,699.74
Last Month:           $ 16,074.05            $   5,847.31
Difference:             $          0.00            $  2,852.43

I have not done much options trading lately given the high market conditions. I don't want to bet against the bull market, but also don't want to pile on additional risks when the stock market seems overextended. The high market is helping me secure more options income though.

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