Happy Sunday!
August continues to be an amazing month. Here are two more closed trades and their realized profits.
This week:
$75 profit in Kimberly Clark (KMB)
$125 profit in Amgen (AMGN)
$75 profit in KMB
From time to time I come across trades that don't meet all my trade entry criteria, but for whatever reason I feel it might be worth taking the risk.
I still share these trades with my private community, but they're labeled as “bonus trades” and I spell out what reservations I have about the trade.
This trade in KMB was one of them - I sold the $135 cash-secured put expiring Sep 20 for $145 in premium.
My slight hesitation about the trade was that its open interest was lower than my usual threshold.
Open interest is important because you want to make sure you can always get out of the trade. The trade might show that it's profitable, but if there's no one willing to take the other side of the trade to close it, you won't able to lock in that profit.
Thankfully the low open interest wasn't an issue, and after about 3 weeks the trade closed for a realized profit of $75, or 54% of max profit.
I typically select only the “best” trades to update my community with because I think it's important to balance risk and profits.
However over time I've also realized that people do want to have more options to select from, so I think issuing these bonus trades helps address that need, as long as I highlight the “risk" that I see on my end.
If you'd like to check out my private community for updates within my real options portfolio, check out the link below.
$125 profit in AMGN
Unlike the KMB trade above, there was nothing to hesitate about in the AMGN trade below.
AMGN dipped after earnings back in early August and I sold a $280 cash-secured put expiring Sep 20 and received $205 in premium up front.
Typically I enter my order to close the trade for about 50% of max profit immediately, but decided to wait to see how the market was shaking out (remember this is just after the crazy drop on Aug 6).
Eventually I decided to try to squeeze a bit more out of the trade and paid $80 to close the position, resulting in $125 in realized profit, or 61% of max profit.
Both AMGN and KMB have been in and out of my portfolio in 2024.
In KMB there have been 4 wins from 4 trades, with $775 in realized profits.
In AMGN there have been 3 wins from 3 trades and $720 in realized profits.
AMGN in particular has had lightning strike twice in this portfolio - where I've actually been able to exit the trade for more profit than I initially received for the trade.
You can read more about those trades at the link below.
Closing thoughts & useful links
The market is feeling much like it did from May to July - calm.
The same way it felt just before a little bit of volatility last Sep/Oct, the way it felt just before the beginning of August.
I was a little over-committed before the volatile period last year, this year I learnt my lesson and was more than ready to put capital to work in August.
As a result, August is going to be my best month in 2024 so far.
I'm going back to being patient and only picking the best trades and waiting for the next wave of volatility when it comes.
Have a good weekend!
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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.