top of page
Writer's picturethemoneyloaf
Aug 1

$55 profit in JNJ

Happy Sunday!

This week:


  1. $55 profit in Johnson & Johnson (JNJ)

  2. Checking in on my Realty Income (O) assignment


 

$55 profit in JNJ


I sold a JNJ Jul 19 $145 cash-secured put and received $105 in premium a while ago.

Unfortunately my profit target in the position wasn't hit, and with earnings coming up, I made the decision to lower my profit target and close the position in case the small profit turns into a large loss post-earnings.

JNJ has been a consistent income generator with 6 of 6 wins and $635 in realized profit so far in 2024.

In 2023, JNJ accounted for $1,534 in realized profits from 8 trades and $1,587 from 8 trades in 2022.


jnj-options-profit

My prediction did come true and JNJ jumped to $160 after earnings.

When these things happen I always tell myself it could easily have gone the other way and dipped to $135, and a win is a win.

If you're somewhat familiar with options, you can join my private community and get updates like these in my portfolio (not recommendations!).

Beyond just trade entries and exits, I also explain my rationale behind each decision so you can understand why I'm taking certain actions.



 

Checking in on my O assignment


I got assigned 100 shares in O back in September 2023 at $57.50 per share, which I last updated in this post.

Since then O has just returned to about $57.50, so I thought it would be a good time to give another update.

Prior to getting assigned the 100 shares, I sold a cash-secured put at the $57.50 strike and received a total of $115 in premium, including a roll.

After getting assigned, I've sold or rolled a covered call 5 times, bringing in $223 in realized profit.

Netting that off my assigned price, that brings my cost basis down to ($5,750 - $115 - $223)/100 = $54.12.

Based on Friday's closing price of $58.07, that's already a $395 profit.

However, there's still the dividend, and I've collected $258 so far, which further lowers my cost basis to $51.54.

Basically I could sell this position right now and lock in $653 in profit.

Another way to look at it if I intended to hold on to these shares, is that I've basically covered the cost for more than 10% of my shares for free.

However, I still have an active $57.50 covered call in play, and with earnings coming up in 2 weeks, I'm inclined to leave it on and see what happens.

And of course I'll provide an update here regardless of how it plays out.

My last update in this assigned position was in May, you can check out that article below and see how the cost basis has continued to change since then.



 

Closing thoughts & useful links


We saw a very slight wobble in the market this week, with the VIX nearly hitting 20 early in the week.

Some big names like MSFT and AAPL are reporting earnings next week. Tech has been jittery and any weakness in these stocks after earnings may look like an opportunity to me.

Have a good weekend!




  • Improve your financial life with my budget and wealth tracker that helps to allocate your budget, calculate savings rate, track your sinking funds, net worth and progresses towards FIRE with minimal input from you - most of it is automated.



 

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.

bottom of page