XLP, WMT, Jan 12

XLP was mostly unchanged today, so we did not try to add to this position. The 4 contracts in our small portfolio (under $4k account) are starting to earn a little profit. This is exactly what we expect for a vertical that is about 5 weeks from expiration. We are waiting patiently for time decay to work it’s magic on this position. Patience Produces Profits.

Our short WMT puts were expiring in a few days. We placed an order to close them at 5 cents, and it was filled. Entering a closing option order at 5 cents or less is commission-free at ThinkOrSwim. We originally sold the put contracts at an average price of 45 cents, closed them at 5 cents, and ended up making 33.75 per contract after costs. With 3 days left to expiration, it doesn’t make any sense to leave the trade in place, hoping to collect that last 5 cents over 3 days. Too much can go wrong and then suddenly your profitable trade has turned into a loser. Control your greed and try to know when enough is enough.

We didn’t stand still on WMT. It was down today by about 1%, which is our trigger. We sold a new 63 put, expiring next week, for 39 cents. We may increase this position tomorrow, depending on market conditions. Subscribers get those trades prior to the orders being placed, so you can choose to trade along with us at the same price. It’s a great way to learn so please join us! It’s only $20 a month……

Stay Optioned, My Friends!


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