The WalMart Options trade continues….
Today, I sold 3 more Jan2 14 78 Puts. One at 39 cents, the second at 42 cents, and the third at 45 cents. The 7 contract position now has an average price of about 38 cents each. The contract is trading at 44 cents, for a 6 cent loss. If closed today, the entire position would lose $42. This is a small and manageable loss. The sales process, where I opened the position at 30 cents and continued to sell all the way to 45 cents today, works well as a risk management tool. When I originally started this trade, if I would have sold the same 7 contracts at 30 cents, I would be down $98.
This position has two days left to expiration but WalMart is now trading at just under our $78 strike price – at $77.83. We have a good chance of this closing profitably, and the time decay is now $38 a day.
Tomorrow, we plan to try and increase the position to 10 contracts, depending on price action. There are many other possibilities for trade adjustments over the next 2 days. Subscribers get all the details for only $20 a month. Join us!