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  • Writer's picturethemoneyloaf

260% profit in AMGN

Happy Sunday!

This week, lightning struck twice in AMGN - I basically had the same AMGN trade from a month ago repeat itself, with even better results.

This week:


  1. $325 profit in Amgen (AMGN)


 

$325 profit in AMGN


Similar to the AMGN trade in February, I placed a put ratio trade in AMGN in March, which means I bought one of the $265 puts and sold two of the $260 puts for an initial premium of $125 for the options cycle expiring April 19 (this past Friday).

The unique feature about put ratio spreads is that if the stock ends up between the 2 put strikes, you can potentially make even more than the initial premium on the trade.

On Friday, AMGN opened the day at about $263, right between the 2 put strikes, with the position showing a $200 profit.

Typically I try to go for 50% of the width of the strikes, in this case $250, but given how volatile the market has been recently, I opted to take the profits right then.

This turned out to be the right move, because AMGN actually rallied almost immediately afterwards and ended the day above $265. Which means if I had held on, I would not have made any additional profit.

amgn-options-trade-management

The irony is that on Thursday night I posted the message above to my private community, and my main concern at the time was AMGN dropping from $163 to $160 and triggering a roll, not shooting above $265 resulting in less profit.

So my goal at Friday's open was first to squeeze whatever I could out of the trade, and then make sure I take it off so that there's no chance of carrying the position for another month.

In both these aspects, I'd say this trade was a success.


amgn-options-trade-profit

The screenshot above shows both the AMGN trades this year.

The first was closed for $279.

This trade was closed for $325.

That's a total of $604 in realized profits.

Usually I tell you that the trade I feature would cover 1 month's subscription to my private community ($49).

This time, these 2 trades alone would have more than covered a full year's subscription - every other trade would be pure profit.



 

Closing thoughts & useful links


The VIX has been inching up. NVDA was down 10% on Friday alone.

Lots of earnings coming out next week in the usual suspects like PEP, TXN, MSFT and ABBV - I have my fingers crossed for some good opportunities.


 

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.

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