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  • Writer's picturethemoneyloaf

$47 profit in SCHD

Updated: Apr 15, 2023

It was a short trading week with not much movement in the markets, nonetheless I do have a couple positions to update this week.

This week:

  1. $47 profit in SCHD

  2. New trade in Medtronic (MDT)



 

$47 profit in SCHD


I sold a put option in SCHD back in February at the $71 strike for $67. The option was going to expire on April 21. This position actually spent a lot of time as a losing position, but eventually SCHD did rally and with the extrinsic value in the option dropping, I decided to close the trade for $20. This resulted in a realised profit of $47, or 70% of max profit.

Since getting assigned 100 shares of SCHD at $77 in 2022, I've tried to maintain an active position in SCHD whenever I can. In 2022, that meant making $588 over 7 trades and $161 so far in 2023. This brings my cost basis to roughly $69.50, not including reinvested dividends. At Friday's close of about $73, this means I'm up about $350 on the trade, vs being down $400 if I had just bought stock at $77. Even if your strategy is to buy and hold stocks or ETFs (like I'm doing with SCHD), it generally pays off to use options to complement said investments. You can read about my previous SCHD trade which returned $92 at the link below.




 

New trade in MDT


I actually haven't traded MDT for a while - not for any particular reason but there just hasn't been the right opportunity. On Monday, an opportunity did present itself and I sold a put option at the $72.50 strike for $71 in premium, the option expires on May 19.


After closing most of the new trades in March, I wanted to try to get a small position on this week to begin to build exposure again. Thankfully MDT hit all of the system's trade criteria and provided an opportunity to ease into a small position. At this point with the VIX so low and the market rallying hard just weeks after freaking out over SVB, I think it's prudent to be a little bit conservative with positions right now, even if it means some capital is going to be underutilised. As always if you'd like to receive trade updates from my real portfolio like the screenshot above, you can check out the Bread Crumb subscription and see if it's something you might be interested in.




 


That's it for this week - it's difficult staying patient in the current environment, but I've learnt to think about risk first, reward second. Let's hope more opportunities present themselves next week.


 

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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