First the APPL Jul 26 $410 puts I wrote on Wed. If you sold/wrote these puts, you hoped that APPL would stay above $410 so that you would get all the money for free. This is exactly happening today. APPL closed at around $440 and these puts expired worthless (to the benefit of put-writing). So indeed within 3 days, you would get over $600 for free, if you did manage to sell them 3 days ago.
Now the MSFT Jul 26 $35.50 puts. Well I thought MSFT would close below
$35.50 today and one had to buy MSFT at this strike price (called "being put"), since almost all day long MSFT was changing hands below $35.50. But miraculously at the last few minutes, MSFT was pushed up through and closed at $35.62. So another $120 clean and free money within days if you have sold this put early this week. This happens quite often with good companies at a good valuation that they simply refuse to go down much further. These are the good candidates for such trading.
For the IBM Aug 2 $195 puts, it is still too early to know the result but its price action is moving in the right direction as it is trading above $195 now. We will see the final result next Friday when the puts expire.
I understand not many people understand what I’m talking about here. But I want to post these real world examples here for future reference, since I’m putting together an idea for a FREE training of this powerful technique for my friends who are interested in. Stay tune and I will post it shortly.
No comments:
Post a Comment