Driftwood “Art”
November Options expired on 20 November with all Options expiring Out-Of-The-Money (OTM) allowing me to keep the net credits received. However, with SPY closing above the $360 resistance level 3 days in a row last week I chose to buy back the 355/360 Call spread expiring in December for 3.50 ($350 for the one contract). On Monday I also sold the 335/340 (Puts) 385/390 (Calls) Iron Condor expiring in January for a credit of $126 to partially cover the cost of the buy back.
My current position therefore now looks like this:
with a downside hedge still in place at ~zero cost.
Here’s what the account looks like:
with $289 “in-the-bank” against an unrealized loss of $168.
Current holdings in spreadsheet format look like this:
I plan to sell more premium in January Options as price moves around.
Update: 14 January 2021:
My January selling was in short-term weekly Options that required numerous adjustments (i.e. trading positions rather than “investment” positions) so are not appropriate for this site. The final position looks like this:
i.e. a small $171 loss on a bearish hedge position with the underlying moving up ~11%. In practice I end up with ~$500 profit from the January short-term trades.
David
With December Options expiring tomorrow and my short $365 Call being In-The-Money as we go into the ex-dividend date tomorrow I have bought back the 365/370 Call spread. If I were not to do this I would likely be assigned (forced to sell 100 shares of SHY) and liable to pay the dividend.
David
With the election over I will let the remaining portion of the position (an Iron Condor expiring tomorrow – Jan 15) expire worthless – thus keeping the credit at which it was sold.
This position was placed as a downside hedge in August when SPY (S&P 500) was trading at ~340. Today, SPY is trading at ~$380 – so I obviously did not need a hedge. As mentioned in these posts, buying Put Options is the “fool-proof” way to buy downside insurance – but it is expensive. By selling Options to finance the purchase of these Puts I was able to buy the “insurance for $171 (see figure at the bottom of the above post) – not bad for 6 months insurance.
In reality I have been selling premium on short-term weekly Options for the past month – so I actually have a small profit, since I don’t like even a small loss 🙂
David