$292 profit from 2 trades in CAT
- themoneyloaf
- Apr 3
- 2 min read
Updated: Apr 5
Happy Sunday!
CAT's stock price is down nearly 16% over the last 6 months, and 9% over the last year.
Yet by double dipping in CAT over the last 6 weeks, I entered and exited 2 trades with a total realized profit of $292.
$292 profit in Caterpillar (CAT) across 2 trades in 6 weeks
$292 profit in CAT
In the middle of February, I sold a cash-secured put in CAT at the $330 strike, expiring on March 21 and received $297 in premium up front.
Unfortunately CAT started dipping almost immediately and in fact fell as low as $326.75 on March 4, just a few weeks before expiration.
Thankfully, it didn't trigger my conditions to roll the position, so I stuck with the position and waited for it to play out.
Eventually, CAT did rally and on 17 March I paid $145 to close the position for a realized profit of $152 or 51% of max profit.
Generally I try to give positions as much time as possible to sort themselves out rather than roll too aggressively/early. May not always work, but that's my preference.
On the very next day, 18 March, I decided to re-enter a position in CAT, this time selling a $310 cash-secured put expiring on April 17 for $275 in premium.
This time, things were a lot more straightforward, and just 4 trading days later, the trade hit my profit target and was closed.
Realized profit on the trade was $140 or 51% of max profit.
As mentioned at the top, CAT's stock price is down from a year ago.
Over the same period I made 7 trades in CAT, they've all been profitable, bringing in a total realized profit of $1,053.
This is why selling options can be a great complement to holding stocks. I'm able to generate positive returns despite a stock's negative performance, at the same time my portfolio is still positioned to take advantage of overall moves in the stock market.
As always, you can join my private community and receive these same updates in nearly real-time.
Closing thoughts & useful links
Looks like the “no drama” market I mentioned last week is over with Friday's down move - thankfully I did close quite a few positions during the more “stable” period earlier in the week for profits!
Now to see what next week brings.
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.
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