$92 profit in SCHD
The VIX hovered around the 14 level all week, and that can only mean one thing - it was a good week for taking profits!
$92 in SCHD
$92 in SCHD
Towards the end of April, I sold one put in SCHD at the $70 strike for $55. Within a few days the position got tested and I decided to double down on the position by selling a second put at the $67 strike for another $62. This basically set up 3 possible scenarios: 1. SCHD continues to drop below $67, I get assigned 200 shares at an average share price of $68.50 (100 shares at $67 and 100 shares at $70) 2. SCHD stays below $70 but now lower than $67. I pick up 100 shares at $70 but my cost basis will be slightly offset by the extra $62 in premium from the 2nd put option. 3. SCHD recovers above $70 and I close both puts for a profit. With about 8 days to go, scenario 3 happened and I managed to close the $70 put for $20 and the $67 put for $5. That's a realised profit of $92, or 79% of max profit across both trades.
So far SCHD has returned $250 of realised profits in my portfolio this year. I'm still looking to pick up another 100 shares to add to my position, but until that happens, I'm happy to keep collecting premium which will continually lower my eventual cost basis. My last trade in SCHD was closed in April for $47 profit, you can read about that trade at the link below.
That's it for this week! We get both the fed interest rate and CPI reading on Tuesday - I will be hoping one or both announcements cause some volatility to set up new positions.
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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.