I decided to do something new today, after having thought about whether I wanted my shares to be called away from me. This morning I watched what was happening with the prices of LUV, CMCSA and PG. They moved up and down throughout the morning. Rather than wait to see what happened by the time of expiration today, I decided that if the premium price got low enough on my contracts I would buy-to-close.

I entered my order to buy back my four CALL contracts of LUV at a strike price of $30 with an expiration date of May 1, 2020 for a premium of $0.10 at 10:41:01AM Eastern. The order was executed at 10:48:01AM Eastern. The stock opened the day at $30.50 It closed the day at $29.23. It had a range for the day of $28.75 - $30.96. So, as it turns out, I could have just let the contract expire worthless. I had originally collected a net profit of $495.99 for a return of approximately 4.13%. It cost me $44.00 to close out my position. So, my final profit was $451.99 for a return of approximately 3.77%. Considering that I had asked $1.05, which would have resulted in approximately a 3.47% return I think this worked out extremely well.

I entered my order to buy back my one CALL contract of CMCSA at a strike price of $38 with an expiration date of May 1, 2020 for a premium of $0.02 at 10:31:12AM Eastern. The order was executed at 10:39:29AM Eastern. The stock opened the day at $37.14. It closed the day at $36.98 It had a range for the day of $36.78 - $37.51. I could also have let this contract expire worthless. I had originally collected a net profit of $86 for a return of approximately 2.26%. It cost me $3.00 to close out my position. My final profit was $83 for a return of approximately 2.18%. Considering that I had asked $0.85, which would have resulted in approximately a 2.24% return, as well as the fact that I could have gotten much more than the $0.87 for selling the contract, I have to admit that I could have played this much stronger. However, doing better than a 2% return in just one week is nothing to be ashamed of.

I entered my order to buy back my three PG CALL contracts at a strike price of $118 with an expiration of May 1, 2020 for a premium of $0.25 at 10:36:05AM Eastern. The order was executed at 12:42:32PM Eastern. The stock opened the day at $117.60. It closed at $116.82. It had a range for the day of $116.32 - $118.37. And we have my third set of contracts that I could have let expire worthless. I had originally collected a net profit of $401.99 for a return of approximately 1.14%. It cost me $78 to close out my position. My final profit was $323.99 for a return of approximately 0.92%. I would say that I’m pretty happy overall with how I played this. I had originally wanted to sell my PG CALL contracts at a strike price of $120. In order to do that I would have had to lower my premium considerably, and would definitely would have made less money (and a lower return) than I did.

I made a net profit of $858.98 for a return of approximately 1.68% for the week.

I’m considering selling four LUV CALL contracts at a strike price of $30.50 with an expiration of May 8, 2020 for a premium of $0.60. The Bid / Ask is $0.40 - $0.60. The BidXAsk sizing is 15X12. The last sold is $0.49 at 3:58PM Eastern on May 1, 2020. However the stock is now selling in after hours at $29.29. So, I want to see what things look like on Sunday night.

I need to see what CMCSA is selling for on Sunday night before I can get a good idea of what I want to do next week. It’s selling for $37.35 in after hours. Right now the May 8, 2020 expiration CALL has the following numbers: Strike $37.50 has Bid / Ask of $0.36 - $0.52; BidXAsk of 330X12; last sold of $0.45 at 2:44PM Eastern on Friday, May 1, 2020. Strike $38 has Bid / Ask of $0.24 - $0.36; BidXAsk of 89X36; last sold of $0.31 at 3:58PM Eastern on Friday, May 1, 2020.

I also have to think about how I want to play PG next week. I don’t really want the stock to get called away at less than $120. PG has a 52 week low of $94.34 and a 52 week high of $128.09. It’s been as high as $124.69 on April 17, 2020. The premium for the $118 strike price for the May 8, 2020 expiration date has a Bid/Ask of $1.28 - $1.70. The BidXAsk sizing is 2X107. The premium for the $117 strike price for the May 8, 2020 expiration date has a Bid/Ask of $1.78 - $1.98. The BidXAsk sizing is 2X67. The premium for the $120 strike price for the May 8, 2020 expiration date has a Bid/Ask of $0.25 - $1.67. The BidXAsk sizing is 50X3. The last sold is $0.60 at 3:48PM Eastern on May 1, 2020. I think I like the way the numbers look for the $120 contract for May 8, 2020 better than the lower strikes for that expiration date and also better than what the $120 contract (or other strikes) for May 15, 2020 look like.

I will admit that I’m feeling a bit of buyer’s remorse seeing that I could have let all my contracts expire worthless. But, hindsight is 20/20. There was no way for me to know during the day how things would finish. I have to accept that I chose to take a more conservative approach and lock in my profit while still holding on to my shares. I can also celebrate that I produced a pretty solid return for the week; I don’t need to be greedy. I’m still a complete beginner at this and I can feel extremely lucky that I’m doing as well as I am. I don’t even have any idea how this compares to what I can expect as typical.

And speaking of being a total beginner, I talked with Vanguard during the week about how I could trade multi-leg options.

  1. I’m not yet approved to trade spreads.
  2. I have to phone in any spreads.
  3. Vanguard can fill simple two leg spreads quickly.
  4. Vanguard will have to submit some type of paperwork to complete an order like an Iron Condor.

So, I don’t think I’ll be trading spreads on Vanguard. I’m going to have to find another platform. I’ll take this as a sign that I need to take it slowly and just keep working with simple PUTs and CALLs for now.

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