Options Update – March 2018

With the markets recent volatility, some readers have asked that I share an update on my options activity.  I continue selling puts against companies I want to own more of and using proceeds to purchase more shares of these companies.

Below are all my trades since July of last year:

Date	Action	Ticker	Expiration	Strike	Call/Put	Qty	Price	Net	close Price	closeout	Days to Exp
7/6/2017	Sell	MO	1/18/2019	90	Put	1	$19.00	$1,894.55	28.5	-$955.45	315
7/6/2017	Sell	MO	9/21/2018	75	Call	1	$5.15	$509.55
8/11/2017	BTC	MO	9/21/2018	75	Call	1	-$2.12	-$217.45		$292.10
7/6/2017	Sell	BDX	1/19/2018	210	Put	1	$18.00	$1,794.55
12/1/2017	BTC	BDX	1/19/2018	210	Put	1	-$1.38	-$143.45		$1,651.10
7/6/2017	Sell	MDT	6/15/2018	97.5	Put	1	$11.25	$1,119.55	11.25	-$5.45	98
7/6/2017	Sell	JNJ	6/15/2018	150	Put	1	$19.50	$1,944.55	20.66	-$121.45	98
7/20/2017	Sell	V	6/15/2018	115	Put	1	$17.50	$1,744.55
2/20/2018	BTC	V	6/15/2018	115	Put	1	-$2.89	-$294.45		$1,450.10
7/20/2017	Sell	V	1/18/2019	130	Put	1	$31.75	$3,169.55	13.45	$1,824.55	315
8/10/2017	Sell	ESV	1/18/2019	15	Put	2	$10.50	$2,094.55
3/3/2017	Assigned	ESV							4.55	-$4.55
8/9/2017	Sell	Teva	1/18/2019	37.5	Put	1	$19.30	$1,924.55
1/18/2018	BTC	Teva	1/18/2019	37.5	Put	1	-$17.00	-$1,705.45		$219.10
8/9/2017	Sell	Teva	1/18/2019	30	Put	1	$12.20	$1,214.55
3/6/2018	BTC	Teva	1/18/2019	30	Put	1	-$11.00	-$1,105.45		$109.10
8/10/2017	Bought	Teva	9/1/2017	17	Call	2	-$1.28	-$261.45		-$261.45
8/10/2017	Bought	Teva	9/15/2017	17.5	Call	5	-$1.37	-$690.45
9/12/2017	STC	Teva	9/15/2017	17.5	Call	5	$2.29	$1,139.55	2.29	$449.10
8/8/2017	Sell	GIS	1/18/2019	67.5	Put	1	$12.30	$1,224.55	11.2	$104.55	315
10/19/2017	Sell	GIS	1/18/2019	67.5	Put	1	$16.90	$1,684.55	11.2	$564.55	315
8/2/2017	Sell	MO	9/21/2018	80	Put	1	$17.50	$1,744.55	12	$544.55	196
9/7/2017	Sell	MO	1/18/2019	90	Put	1	$28.50	$2,844.55	28.5	-$5.45	315
10/17/2017	Sell	V	12/20/2019	160	Put	1	$52.52	$5,246.55	44	$846.55	651
10/25/2017	Sell	T	9/21/2018	40	Put	2	$7.30	$1,454.55	4.65	$524.55	196
10/26/2017	Sell	BBL	6/15/2018	35	Put	1	$2.55	$249.55
2/28/2018	BTC	BBL	6/15/2018	35	Put	1	-$0.66	-$71.45		$178.10
10/30/2017	Sell	CVS	1/19/2018	80	Put	1	$11.90	$1,184.55
1/8/2018	BTC	CVS	1/19/2018	80	Put	1	-$2.40	-$245.45		$939.10
12/11/2017	Sell	CVS	1/18/2019	77.5	Put	1	$10.42	$1,036.55	11.75	-$138.45	315
1/8/2018	Sell	CVS	5/18/2018	82.5	Put	1	$7.30	$724.55	13.33	-$608.45	70
10/31/2017	Sell	OHI	6/15/2018	29	Put	1	$2.50	$244.55
12/18/2017	BTC	OHI	6/15/2018	29	Put	1	-$2.45	-$250.45		-$5.90
11/13/2017	Sell	HBI	1/18/2019	20	Put	1	$3.00	$294.55	2.6	$34.55	315
11/14/2017	Sell	WMT	3/16/2018	100	Put	1	$10.85	$1,079.55
02/20/18	BTC	WMT	3/16/2018	100	Put	1	-$5.97	-$602.45		$477.10
12/01/17	Sell	BDX	3/16/2018	230	Put	1	$10.93	$1,087.55
01/30/18	BTC	BDX	3/16/2018	230	Put	1	-$3.00	-$305.45		$782.10
12/01/17	Sell	Teva	1/18/2019	32.5	Put	3	$17.20	$5,154.55
3/6/18	BTC	Teva	1/18/2019	32.5	Put	3	-$12.33	-$3,704.45		$1,450.10
12/11/17	Sell	RDSB	7/20/2018	60	Call	1	$6.34	$628.55	12	-$571.45	133
12/15/17	Sell	PG	9/21/2018	92.5	Put	1	$5.20	$514.55	14.05	-$890.45	196
12/15/17	Sell	GE	9/21/2018	18	Put	3	$1.64	$486.55	3.6	-$593.45	196
12/15/17	Sell	CHD	7/20/2018	50	Call	1	$2.78	$272.55
2/14/18	BTC	CHD	7/20/2018	50	Call	1	-$2.45	-$250.45		$22.10
12/28/17	Sell	SO	8/17/2018	48	Put	1	$2.75	$269.55	5.15	-$245.45	161
12/28/17	Sell	SO	1/18/2019	50	Put	1	$4.75	$469.55	7.7	-$300.45	315
01/08/18	Sell	WSM	8/17/2018	57.5	Put	1	$7.70	$764.55	7.2	$44.55	161
01/18/18	Sell	BGS	8/17/2018	30	Put	1	$2.50	$244.55	5.6	-$315.45	161
1/18/18	Sell	BGS	8/17/2018	35	Call	1	$1.82	$176.55
2/14	BTC	BGS	8/17/2018	35	Call	1	-$1.60	-$165.45		$11.10
1/19	Sell	IBM	9/21/2018	170	Put	1	$15.65	$1,559.55	17.75	-$215.45	196
1/23/18	Sell	OHI	1/18/2019	30	Call	5	$0.70	$344.55	0.7	-$5.45	315
01/23/18	Sell	T	1/18/2019	40	Call	2	$1.50	$294.55
02/28/18	BTC	T	1/18/2019	40	Call	2	-$1.33	-$271.45		$23.10
02/01/18	Sell	OMI	9/21/2018	17.5	Put	5	$2.20	$1,094.55	2.55	-$180.45	196
02/13/18	Sell	IBM	9/21/2018	150	Put	1	$10.26	$1,020.55	7.45	$275.55	196
02/14/18	Sell	OHI	1/18/2019	25	Put	4	$2.75	$1,094.55	2	$294.55	315
02/16/18	Sell	MO	1/18/2019	85	Put	1	$20.66	$2,060.55	20.66	-$5.45	315
02/20/18	Sell	SLB	9/21/2018	72.5	Put	1	$9.09	$903.55	9.2	-$16.45	196
02/20/18	Sell	CVS	8/17/2018	80	Put	1	$10.57	$1,051.55	13.38	-$286.45	161
03/05/18	Sell	HSY	8/17/2018	105	Put	1	$8.42	$836.55	8.42	-$5.45	161
03/05/18	Sell	ESV	1/18/2019	10	Put	2	$5.40	$1,074.55	5.6	-$45.45	315
03/06/18	Sell	V	1/17/2020	165	Put	1	$43.00	$4,294.55	43	-$5.45	679
03/07/18	Sell	XOM	6/21/2019	80	Put	1	$10.96	$1,090.55	10.96	-$5.45	469
03/08/18	Sell	MO	1/18/2019	75	Put	1	$12.73	$1,267.55	12.84	-$16.45	315
TOTALS								$55,334.75		$7,300.65
Booked										$7,781.50

The last update on trades had generated $46,022 in revenues. I’m approved for “naked” options trading meaning I can sell puts on companies I don’t own and without having the cash to purchase said security. My collateral is owning shares of companies as equity to cover.  This update shows I’ve now generated $55,334 in revenues. Most of this money has already been used to purchase more dividend paying stocks.  The closeout column is what my total profit will look like if I closed out all trades today.  I’ve already closed out quite a few positions, you can see the trades.  I’m actually down to $7,300 from $12,000 in the last update with the market corrections.  The difference in the revenues and profits is what it would cost me to close out all the trades, about $48,000.

I’ve already booked profits of $7,781.50 on closed trades.  Since my booked profits are nearly equal to Total profits, my open trades are neutral right now.

Note: These profits won’t include dividends which I do receive from investing in other dividend paying stocks with the revenue.

Since last update, I’ve made at least 15 trades, you can see the dates on all my trades above.

One of my top trades was closing out a $115 Visa put I sold.  I (BTC) bought to close that put and made a net profit of over $1400.  Yes, $1400 on 1 single put!  I also closed out some TEVA puts for similar gains.  My biggest gain to date was a BDX put I closed out for a sweet $1650 net profit!

My V puts continue to be rock solid.  I sold an additional V put and quite a few new puts in HSY, MO, IBM, XOM etc.  In fact, I used some of these profits to buy an additional 40 shares of V in this account recently.

So what happens in the case that one of these companies is lower near expiration (in the money)? Well, I have a few options.

a. I can do nothing and I’ll be required to purchase 100 shares of said security at the strike price. It’s sort of like I’m buying the company right now at a discount.

b. I can decide to purchase back the put for more money at a loss of approximately (strike – current share value) x 100.

c. Third option is to “roll” the put forward. What this means is that I simultaneously purchase the put back and sell another longer dated put so that I haven’t lost any money.

Any profits will go directly into purchasing more shares of solid dividend-paying companies.

This is just another avenue I’m using to earn additional profits so that I can get this dividend snowball moving faster.  I actually just broke the $12,000 forward dividends goal ahead of schedule.  I’ll probably be posting about that soon.  The extra options income is certainly helping speed up the process.  My forward dividends are currently  $12,286, up from $11,197 a month ago.  My goal by the end of the year is to be at a forward dividend income of $13,000.  I’ll need to put to work about $23,800 at a 3% yield which shouldn’t be a tough task.

Best long ideas currently are SQ, V, BRK.B, MO, CVS, DIS to name a few.  I’ll be adding more to these companies throughout the year at these prices.  Yes I know that SQ and BRK.B don’t pay a dividend, but I’ve decided to have a speculative portfolio that contains non dividend paying stocks up to 10% of the portfolio value for now.