Happy Sunday!
December is turning out to be an amazing month for option profits. You might remember that September and October were difficult months because of all the increased volatility, but that increased volatility also provided great opportunities for new trades, like the 2 that I'm sharing today - which paid off about 6 weeks later.
This week:
$215 profit in Microsoft (MSFT)
$83 profit in Illinois Tool Works (ITW)
$215 profit in MSFT
On 26 October, just a few days before the S&P would enter correction territory, I wanted to take advantage of the increased volatility to take larger positions that would pay off in the near future.
One such position would be selling a $295/300 put ratio spread in MSFT - expiring Dec 15 for $215.
Without getting into too much detail about how a put ratio spread works, basically I would have made money if MSFT stayed above $300 per share, or if it dropped down to $295.
This gives me multiple ways out of this trade, and it almost doesn't matter which one happens, because they all result in profit.
In this case, MSFT stayed comfortable above $300 and I left the trade on to expire worthless, which locked in the full $215 in realised profit - a rare 100% of max profit.
This makes it 9 wins out of 9 in MSFT throughout 2023, with a total realised profit of $1,331.
This trade (like many others) is shared in real time with my private community with my thoughts behind trade entry and exit, so that everyone knows and understands my personal reasons for taking such a trade for myself.
If you'd like to receive my trade updates (not recommendations) in real time, you can sign up for my Bread Crumb subscription via the link below.
$83 profit in ITW
In an almost identical trade, I sold a $195/200 put ratio spread in ITW on Oct 24 for $83, which would expire on Dec 15.
Similar to the MSFT trade, ITW didn't come anywhere close to the $195 put throughout the time of the trade, so I left the entire position to expire, locking in $83 in profits.
I didn't trade ITW all that much this year, but this makes it 2 wins from 2 trades, with a total realised profit of $212.
Again, looking back on October, it was definitely a tough month for the portfolio, but it definitely laid the foundations to reap the profits this month (and hopefully beyond).
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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.