U[dating the WalMart trade…
On January 6 WalMart (WMT) closed at $78.21. We opened a position on that day, and built it up over the next few days/weeks.
Today, we are short a mixture of puts and calls on WalMart. Our original 78 puts have become $77.5 puts expiring next week. We are short 11 of them. If that 11 contract position was all we had, we would be down over $3 a share, or more than $3300. Or, if we would have bought the 1100 shares outright on January 6, we would be down about $3500.
Today, we are down on this position about $2200. This is the magic of options. Over time, even if you are wrong about the timing of setting up your original position – as we were on this one – you can make it work out. The most important action is to admit your were wrong and change your position immediately. After realizing our mistake, we began selling calls against the long WMT position, and even sold a few more puts. The total position is now 28 contracts with a mixture of puts and calls. Our Delta on the position is right around zero, while the Theta is now $80. So, we are neutral on WalMart and getting paid $80 a day to be here.
This position will be profitable over time, and it probably won’t take too long from here. We can’t predict the future, but we can manage risk on a daily basis and get paid for doing it. Selling the options has made us over $1000 in the 5 weeks we have had this trade open.
This is the kind of thing we do every day at DeepPocketOptions.com. We trade for income by running the equivalent of a small insurance business. We get paid to accept a defined amount of risk for a defined time period, and do it over and over, one contract at a time.
Join us! You will learn about the 3 possible outcomes, the process of switching your point of view, and creative ways to make money with options.
Stay invested, my friend.