Boeing position update and more
Our new BA position could not have had better timing. After ending last week with no position, we started selling puts again yesterday when BA was down. Today’s news drove it down again so we sold more puts. The entire position is now short four 144 puts and short two 143 puts, all expiring this week. The position has a time decay of $77 a day but that only lasts until Friday. Our system has created a profit for the new position of about $50, even though the stock has dropped. Remember, above all – we don’t want to lose money! We will continue to build this position only if the stock price drops and then tomorrow we will change our focus to expiration.
We can’t possibly know what will happen over the next two days as these contracts expire on Friday, and we don’t concern ourselves with that. We will react to whatever structure the market gives us and use our system to look for the best income opportunity. That opportunity may be closing the position for a few cents, it may be allowing the contracts to expire, or it may be rolling forward, or it may be letting the shares be put to us, or some combination of all of those. Subscribers to DeepPocketOptions get all of the trades before orders are placed and they also get detailed, timely explanations of the available choices at expiration. Join today for only $20!
Update on the WalMart position: We have a covered call position and the calls are now priced at about 10 cents. We have a GTC order in place to buy those back for 5 cents, which is commission-free at Think Or Swim. Our daily time decay is $48. If the contracts are closed at 5 cents, we will then look to sell new calls with next week’s expiration.
Update on the Apple position: We have been patiently waiting for an UP day, and today appears to be the day. We sold one call and have orders in place to sell 2 more at higher prices. Apple has been in a very tight range for some time. Since February, the stock has been in a range that moves between 123 and 133, more or less. This is the optimum situation for option sellers. There is just enough volatility to keep option prices decent, and the small range leaves us with many solutions for each expiration. We don’t end up with positions that are so far In The Money that they have little time value. Option positions that are way ITM are basically done and the contract is usually not worth trying to roll – there is just not enough money to make it worthwhile. But, as always with options, there are other ways to deal with far ITM contracts. Rolling the same strike from one month to the next is what we would always like to be doing, but sometimes it is not the best choice.
Tomorrow we will start looking at our expiration choices for BA, WMT, and APPL.
Stay optioned, my friend!