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Writer's picturethemoneyloaf
Nov 2, 2023

$49 profit in DKS

Happy Sunday! Lots of market movement this week which led to some good opportunities, but also some problematic positions in the portfolio as well. I'll talk about one of each today. This week:

  1. $49 profit in DKS

  2. Rolling a $525 position in TXN



 

$49 profit in DKS


Starting with the good news, I sold a $90 put in DKS expiring on Nov 17 for $95 which sat for just 5 days before being closed for 52% of max profit.


dks-option-profits

DKS is one of the stocks on my watchlist that can be a bit prone to bouts of volatility, so although I do like trading the stock, I sometimes am a bit more cautious lest it generate some big swings that have happened in the past. That said, it has been a pretty consistent performer in the portfolio with 6 wins from 6 trades and an overall realised profit of $345. This trade was shared and managed in real time with my private community via the Bread Crumb subscription. The $49 realised profit from this single trade would have covered the subscription fees for the month, meaning any other profitable trades would have been pure profit (and there have been 3 others this month)!




 

Rolling a $525 position in TXN


Way back in August, I sold a put in TXN at the $155 strike for $165. Unfortunately, TXN dropped below $155 and I rolled it once on Oct 19 for $237, to see if it would bounce after earnings. Unfortunately it was not to be, so the position was rolled once again this week for $123. This brings the total premium collected to $525, which is good because it provides a lot of flexibility to deal with this difficult position.


txn-option-trade

One other important think to remember is that when this trade was put on back in August, TXN was trading at $170, already somewhat down from its $186 peak in July. By selling the $155 put, I was promising to buy 100 shares of TXN at $155, a $15 discount compared to the market price. Some people will say ‘well then you should just have waited and bought it now for even less than $155’, but I can almost guarantee no one who says that is actually buying stock when they've seen it drop from $186 to $143. This is why it's important to sell puts on stocks you don't mind owning, at least for a little while. If this TXN position does get assigned, I'm totally fine with collecting the dividend and selling covered calls until the stock eventually gets called away. I've traded TXN 5 times this year, with 4 wins with a realised profit of $223 - you can read about the previous trade at the link below.





 

Closing thoughts & useful links


The S&P 500 officially closed in correction territory on Friday, meaning anyone who has stocks in their portfolio (not just options), will be looking at a little bit of red in their portfolio.

It's all part of the investing journey and if anything, a correction is an opportunity to buy more stocks at a discount. I've initiated a few positions in stocks on my watchlist this week, and looking forward to more in the weeks to come.


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This newsletter 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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