I also forgot to post a previous options trade I had. I sold another put of my speculative bank play, BBVA, which I actually am a member of. BBVA also holds my primary mortage and I've decided I wouldn't mind being a long-term shareholder. I sold 3 Jan 18 '13 $8 Puts @ .90. I currently have 9 naked puts against BBVA.
I Sold 1 BBL Dec 21 '13 $50 Put @ 4.50
This trade could turn out a few ways:
1) I hold shares until expiration and shares are trading above $50.00. I will get to keep the $450 in options premiums.
2) I hold shares until expiration and shares are trading below $50.00. I will get assigned 100 shares of BBL at a cost of $45.50/share. This price also corresponds to a yield of 4.8%.
3) Shares of BBL go on a run and I decide to buy back the put early for a profit less than $450.
I currently have 16 open options positions and a total options profit of $2794 for 2013. My options page has been updated accordingly.
If I had enough capital I'd seriously contemplate selling a put against BBL. That's a pretty good chunk of puts on BBVA. It's always nice to get to invest in a company that you use their product/service regularly.
ReplyDeleteHi PIP,
DeleteI think BBL will be fine long-term but I'm probably done selling puts for now. I don't mind collecting dividends and premiums to wait. I'm also not as worried about BBVA as I was last summer during all of the Spanish banking crisis. As you mention, I'm always more comfortable investing in companies in which I use their products/services. They also pay an extremely attractive dividend even after the foreign tax withholding.
Thanks for stopping by!
I run of free capital, so I am on halt, but will do the same soon. I love put selling. As far as terminology, what do you mean by "double down on my puts."? Do you mean you rolled down and to pay for this roll over you sold more puts?
ReplyDeleteI did it with a few of my options in the past and may be I will be required to do it after this month expiration too. thanks for explanation.
Hey Martin,
Delete"Double down" is usually a gambling term, I use it when I've played blackjack. Basically I meant that I've doubled my risk to try and double my reward by selling a second put. However, I'm done selling puts on BBL as I'll be overweight if the stock if these puts are assigned.
I haven't rolled puts yet but I understand the concept. I'm usually comfortable letting them get assigned if I don't close early for profit.
Take care!