A bit of a quiet week while the market slowly inched to an all-time high.
Unfortunately not all stocks were along for the ride, so even though there were profits, I also had to deal with a position that went in-the-money this week.
$45 profit in Smuckers (SJM)
rolling a position in Starbucks (SBUX)
$45 profit in SJM
A couple of weeks ago I sold a cash-secured put in SJM at the $115 strike expiring on Jan 19 for $60.
The market started 2024 as it ended 2023, and I once again adjusted my price target higher to get more profit.
Eventually I paid $15 to close the trade, resulting in $45 realised profit (or 75% of max profit).
Rolling a position in SBUX
Not all trades go as smoothly as SJM above, as in the case of this SBUX position.
In late December I sold a cash-secured put at the $95 strike expiring Jan 19 for $110
Unfortunately SBUX has not held above $95, and I decided to roll the position to Feb's option cycle for another $202.
With the total premium collected at $312, there's actually quite a lot of premium to play around with in this trade at the moment,
It's also important to note that even with SBUX closing on Friday at $93.86, this trade would be profitable in the case of early assignment.
That's because the difference between my assignment price of $95 and the closing price of $93.86 is only $1.14, or $114 for 100 shares.
But I already collected $312. Which means I could close my position at market value and still walk away with nearly $200 in profit.
For all these reasons, I'm willing to let this play out for a bit and wait a little while more before deciding what to do with this position.
Closing thoughts & useful links
The S&P 500 hit a new all-time high on Friday. I don't know if it'll continue going up from here or if we'll have a period of consolidation, but I'm ready for both scenarios.
Earnings season starts proper next week with portfolio favourite JNJ reporting their earnings among others, I'll be hoping for some opportunities to initiate new positions then.
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.