In my last post I finished by reporting that I placed my first order on an option. It was a Put contract for BYND with a strike price of 100, a premium of 21 and an expiration of January 15, 2021. Unfortunately, on Tuesday the stock took another large gain and my order expired at the end of the day. So, that night I took another look at the options chain and decided to place an order for another Put contract at a strike price of 120, with a premium of 40 and an expiration date of January 21, 2022.
Late in the day on Wednesday my order was executed! Now the adventure begins.
Today the stock closed at 118.64 and it’s now at 117.90 in after hours trading. The options chain for contracts expiring on January 21, 2022 shows Puts contracts with a strike price of 115, last premium of 39.20 and bid / ask of 37.05 / 38.55; strike price 110, last premium 32.58, bid / ask of 33.90 / 35.40. So, I could have brought my net price lower had I waited until today, but I wouldn’t have made as much on the premium. For what it’s worth: the 120 strike price has a last premium of 40.34 with a bid / ask of 40.30 / 42.25.
Edit: I should probably acknowledge that what I’m doing right now is pretty much the exact opposite of what Nassim Taleb suggests. I am exposing myself only to the negative Black Swan and preventing myself from being exposed to the positive Black Swan.
Also, I think it’s worthwhile filling in a few more details about my experiment with options and BYND. I had started taking a look at BYND in December 2019, when it was trading around $75. I opened my Vanguard account with $8000 on January 4, 2020 with the idea that I was going to sell a near-term expiration Put contract to get me into the stock somewhere in the $73 - $76 range. But, the stock went on this huge upwards spree right as I was getting started and my application for the options trading account wasn’t approved until January 13, 2020. So, I had to come up with a new strategy and the 2 year LEAPS contract was the best I could do.
I give thanks to the Universe for the abundance it provides me. I surrender and am open and ready to receive.
Bhavatu sabba mangalam - May all beings be happy