Quick update on the 5 trades so far. Comments welcome.
Trade 1: V Bull Put Spread – As mentioned in the original post about this trade, by going longer-term, this trade was less affected by the drop than a shorter-term trade would be. Part of the trade plan was setting a stop loss if the stock broke back below the 20 day moving average which happened mid last week, which would have seen the trade closed for a $19 loss. Even with the selling, the trade would currently only be down $34 which is SIGNIFICANTLY less than a monthly trade would be.
Trade 2: INTC Cash Secured Put – The worst performing of the 5 trades and is down $264. Was a bit unlucky with the timing on this one as it dropped about 5% the day after opening and chip stocks have been badly impacted by the trade war. The initial stop loss was set at $46 and the stock closed today at $44.76 so we have some decisions to make. I tend to think the move has been a bit overdone and I believe in the company long-term. If we take assignment, we can turn it into a Wheel trade.
Trade 3: RUT Directional Butterfly (Bearish) – This trade is doing well as RUT drops down near the center of the butterfly. Currently at +$75 and should continue to do well if the market stays here or drops lower.
Trade 4: SPY Short-Term Bear Call Spread – Got this one spot on and profits have accrued quickly. Basically sitting with a full profit of $210 so this could be closed early, or even held a few more days to let it expire worthless.
Trade 5: MMM Put Diagonal – Only been open one day and P&L is flat so far. I feel like MMM is deeply oversold and due for a bounce here, so it may not trade down into our profit zone, but we have zero risk on the upside, so you never know, we might get lucky.
Have a great week everyone and trade safe!
Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek advice from a licensed financial adviser.