$90 profit in KMB
- themoneyloaf
- Jul 31
- 3 min read
Hello!
One positive aspect about selling options is that I don't necessarily need to get the direction of the move correct (and in fact I often get it wrong), as this week's long trade update will demonstrate.
This week:
$90 profit in Kimberly Clark (KMB)
$90 profit in KMB
Most of the market volatility from April and May was beginning to subside in June, so I was on the lookout for any stocks that were showing any weaknesses as an opportunity to allocate some capital.
KMB had a dip early in the month going from about $145 to $135, and I was able to sell the $125 cash-secured put expiring July 18 for $125 in premium upfront.
I was trying to capture the down move indicated by the arrow in the chart below.
Note that generally when selling cash-secured put options, the desired outcome is for the underlying stock to rally, or at least stay where it is.
You can see from the chart that that's not what happened. In fact the stock continued to drop and never recovered above $135, which is roughly where I entered the trade.
The good news is that while KMB didn't rally, it didn't drop beneath my strike at $125 either.
This means that my cash-secured put stayed out of the money (OTM) for the entire duration of the trade, which caused the value of the put option to continue to drop.
The end result is that I paid $35 to close the position in early July, which means realizing a profit of $90 (or 72% of max profit) on this trade.
One of the big advantages of selling options is that the option seller doesn't have to get the stock direction precisely right.
Ultimately I'm relying on the strategy and market conditions to play out over time, rather than the accuracy of my ability to read the market.
If you'd like to follow along, I do share updates from my real portfolio to my private community (not recommendations).
This portfolio has enjoyed 34 consecutive months with positive returns since September 2022 and you can find out more at the link below.
Closing thoughts & useful links
Unfortunately the couple of companies on my watchlist this week didn't provide any good opportunities to allocate some capital.
At the same time the entire market continues to inch higher, which is generally not the best time to take on too many positions.
Hoping for more movement next week!
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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