$700 in MSFT
- themoneyloaf
- 4 days ago
- 3 min read
Happy Sunday!
Whenever I mention a put ratio spread I always say it's one of my favorite trades to put on.
Today's trade in MSFT turns a challenging position to a $700 win and demonstrates why.
ps: reminder that the link to indicate interest in my last course of 2026 will be going out on 24 May, so look out for it!
This week:
$700 profit in Microsoft (MSFT)
$700 profit in MSFT
Towards the end of February I sold a $370/375 put ratio expiring Mar 27 for $330.
With a put ratio, the sweet spot is between the two strikes, in this case $370 and $375, but unfortunately MSFT dropped as low as $356 on Mar 27, which means I had to roll the trade, otherwise I'll get assigned 100 shares of MSFT at $370 each.
Through rolling the position, I converted the trade to a $360 | $377.50/$382.50 jade lizard for an additional $670 credit , bringing my total premium to $1,000
This improves my outcomes in both directions, lowering my breakeven to the downside to $350 per share. On the up side, if MSFT rallies past $382.50, I'm still guaranteed to make $500 because of how the jade lizard works.
Turns out, after the roll MSFT started rallying non-stop. I didn't want to let it run past the $382.50 mark, so I eventually opted to pay $300 to close the trade, locking in $700 in realized profits.
(Just a note that the actual closing update was much longer and I couldn't fit it into one screenshot, so I'm cutting it off with a shorter explanation after the screenshot)
This is one of my favorite trades of the year so far, not just because of the $700 profit, but also because it really shows how flexible options are in getting out of difficult situations.
Just because the initial trade didn't work, doesn't mean I have to close the position for a loss or immediately take assignment of 100 shares.
Similarly, just because it ran past my $382.50 threshold doesn't mean I have to sit back and just take the $500 profit, I can still manage the trade on my own terms to get a profit I'm happy with.
Ultimately this is the reward of trading. You are in control of your own decisions and outcomes, it all depends on mindset.
This trade (and all trades in this newsletter) are shared in close-to real time to my private community as updates in my own portfolio (not recommendations). If you're familiar with the basic mechanics of options, you can consider joining the private community to view these updates as well.
And of course the guidance for managing and closing both trades were posted to the community as well.
You can find out more about my private community at the link below.
Closing thoughts & useful links
If you can believe it, the S&P 500 closed at a new record yet again this week, despite everything that's going on in the world.
That said, there were some opportunities this week with earnings, I'm looking forward to sharing them in due time.
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.
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