Hello!
A couple of profitable trades this week - let's get right into it.
This week:
$110 profit in Starbucks (SBUX)
$45 profit in Pepsi (PEP)
$110 profit in SBUX
Yup, it's yet another profitable trade in SBUX! This time I sold a $95 cash-secured put put expiring on Jul 21 for $145 in premium and closed it for $35. This is a realised profit of $110, or just about 75% of max profit.
The total capital required for this is $9,500 (100 shares of SBUX x $95).
The trade was on for exactly a month (May 23 to June 22), and brought in a profit of $110.
Assuming you're able to put on this trade 10 months of the year for roughly the same amount of profit, that's $110 x 10 = $1,100.
Divided by $9,500 capital, we're looking at about 11.5%. That's a very realistic return - just from trading the same stock 10 months a year.
And that's how you generate cashflow without ever needing to buy stock.
$45 profit in PEP
Similar story in PEP, on June 6 I sold a cash-secured put at the $175 strike expiring Jul 7 for $85 6 trading days later on June 14, the position closed for $40, which is a realised profit of $45 or about 53% of max profit.
I was probably a bit aggressive in closing this for a profit, but profit is profit and at least capital has been freed up for future opportunities. As it stands the portfolio has 4 active positions, 3 are profitable and 1 is a roll, so overall things are looking good. I'll provide a full update of June's trades in next week's issue. Don't forget if you're familar with options and want to get real time updates about what trades I'm putting on or taking off in my portfolio, you can follow along with the Bread Crumb subscription (the SBUX trade alone would pay for the cost of the subscription)
That's it for this week - the portfolio is looking very light, but with the VIX so low, I'm trying my best to be patient and wait for the right opportunity instead of forcing trades. If you want to take control of your finances, I've launched a budget and wealth tracker that can help you do that (check out the demo video!)
This article is for educational purposes only. This is my own portfolio which is being managed according to my goals and risk tolerance. Your situation is likely different and you should do your own due diligence before investing in stocks or options.