Looking back and looking ahead
I’ll start out with the material updates.
I was assigned on one CALL of CMCSA at $36. The stock had closed at $36.54 and I had received a premium of $0.60. So, in my estimation I did very well on this trade. In order to have done better I would have had to sell the CALL at $36.50.
My three CALLs of PG at $116 expired worthless. The stock closed at $115.95. I would rate this as another extremely successful trade. I kept the entire $1.05 premium and I still own all my shares. I’m really glad that I ended up making some money on this stock this past week. I’m in a good position to make some money next week as well.
I never did sell my four CALLs of LUV. So, I didn’t make any money on this stock during the past week. The good news is that the stock rebounded by the end of the week and closed at $27.20. Now the options chain looks like I’ve got a chance to sell CALLs at $30.
My two PUTs of GE at $6 expired worthless. The stock closed at $6.20. I kept the entire premium of $0.08. While this made me only $14 net, that still represents approximately a 1.16% return in about three days.
My one PUT of HTZ at $2.50 expired worthless. The stock closed at $3.27. I kept the entire premium of $0.15. Interestingly, this also netted me $14. What’s better is that outcome represents a 5.6% return in about three days!
Reviewing the past week’s outcomes is not the only looking back I had done this morning.
I also had a bit of regret as I calculated my overall return on my CMCSA shares. I averaged approximately a 7.12% return per year for the entire time I held the shares. Had I sold at the 52 week high, I would have generated approximately 11.30% per year. But, I realized that it doesn’t make sense to engage in the wouldacouldashoulda. Instead, I chose to take the perspective that I wrote about above. Given the way that the stock was trading right now I did about the best I could have done. I can choose to be happy with the outcome, and that’s exactly what I will do.
Here is the looking forward, based on examining the options chains for the May 15, 2020 expirations.
I had to decide if I wanted to continue to trade CMCSA. I could place a PUT at $36, or perhaps $35.50. But, I decided that I should compare what type of return I would get using the cash that way instead of using it differently.
The long story short is that I decided to take all the “available” cash in my margin account and sell 18 PUT contracts of HTZ at a strike of $3.00 and a premium of $0.30 on the May 15, 2020 expiration. Assuming that I’m able to sell those contracts on Monday at that price, I would get approximately a 10% return for the week! The Bid/Ask as of Friday, May 8, 2020 was $0.20/$0.30 with a last sold of $0.30. The BidXAsk was 131X220. Update: Now that I have access to market depth data, I have lowered my premium to $0.25. I may still need to lower it to $0.20 to guarantee having my orders filled.
Note: What I’m calling available is the amount that I should be able to withdraw as of Monday, May 11, 2020 (or so). I’m not interested in trading on margin.
I entered my order to sell 4 CALLs of LUV at a strike of $30 and a premium of $0.20 on the May 15, 2020 expiration. The Bid/Ask as of Friday, May 8, 2020 was $0.15/$0.20 with a last sold of $0.17. The BidXAsk was 9X128. Update: Now that I have access to market depth data, I have lowered my premium to $0.15. This premium price should guarantee that my orders are filled.
In originally entered my order to sell 3 CALLs of PG at a strike price of $118 and a premium of $0.70 on the May 15, 2020 expiration. The Bid/Ask as of Friday, May 8, 2020 was $0.28/$0.71 with a last sold of $0.68 (near the end of the day). The BidXAsk was 30X3. Rather than sticking with my plan from last week of aiming to liquidate my holdings I had decided to see if I could ride the stock higher. However as I was writing this entry I realized that pursuing that strategy was likely to get me lower returns. I would be letting my ego and regret get in the way of making a better decision based on what is happening in the market right now.
So, I canceled that order and entered a new order to sell 3 CALLs of PG at a strike price of $116 and a premium of $1.60 on the May 15, 2020 expiration. The Bid/Ask as of Friday, May 8, 2020 was $1.23/$1.62 with a last sold of $1.46 at the end of the day. The BidXAsk was 50X11.
I’m looking at this experience of trading options as part of my spiritual practice. It may seem very strange to consider something so material to also be spiritual. However, I am approaching this by consciously focusing on when I am letting ego or regret cloud my decisions. I am dealing with the reality of the market place right now instead of focusing on the past or hoping for what might happen in the future. I am aiming for what I desire and also letting go of the outcome. I am writing these journal entries and reflecting on my experience and how I am reacting to it. I am accepting that I’m still new to this and I have a lot to learn. I am truly embracing “beginner’s mind.”
I am enjoying this particular adventure in my life right 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