The VIX has finally jumped above 25 in 2023 and I am here for it!
The number of open positions in this portfolio jumped from 4 last week to 8 this week - let's hope this trend of increasing volatility continues for a while longer.
New trade in Starbucks
New trade in Microsoft
Rolling last week's Walgreen's trade
New trade in SBUX
As volatility kicked in on Wednesday, an opportunity surfaced to ease into new positions, leading to a new trade in SBUX. I sold a $90 put in SBUX expiring April 21 for $110, which is currently trading for $87 - or an unrealised profit of $23. Personally I wouldn't mind picking up more SBUX for the year - in fact I had a $97.50 put that expired on Friday in my personal account which I was secretly hoping would get assigned, but unfortunately that didn't happen. SBUX has been a great performer in my portfolio, bringing in:
$55 in 2018
$93 in 2019
$369 in 2020
$709 in 2021
$1,624 in 2022
and $248 more in realised profits in the first 2.5 months of 2023 alone
That's a total of $3,098 which means 30% of my existing $10,000 worth of shares in SBUX has been offset by selling options in this stock alone. I'm looking forward to basically owning SBUX for free as this amount grows. You can read about my last SBUX trade from just 3 weeks ago in the link below.
New trade in MSFT
A new put ratio appears, this time in MSFT. I sold a $220/225 put ratio expiring Apr 21 for $154
As you can see from the screenshot, it's only been a week but it's sitting at $111 unrealised profit, or 72% of max profit. As I mentioned in my AAPL trade update, my profit target for put ratio spreads is not a percentage of the initial credit, but rather a percentage of the max profit provided by the put spread that is embedded in the ratio spread. Put ratios sound a bit complex at first, but when you understand how each of the option legs interact with each other, you'll realise that actually it's a very flexible trade with many ways of making money - which is why it's one of my favourite trades and has naturally made its way into the syllabus for my options course. For a bit more context, check out my earlier post on a put ratio spread in AAPL.
Rolling last week's WBA trade
Last week I shared my WBA position which was not working out - on Thursday I decided to roll this trade out for an extra $62 credit. The initial trade was a cash-secured put at the $35 strike in WBA with a $54 credit. So I'm now sitting on the same $35 cash-secured put, only this time expiring on April 21 with a new total credit of $116
I'm still open to getting assigned another 100 shares, but I'm going to keep rolling to reduce my cost basis as much as possible until the assignment is forced upon me, rather than accept it automatically. Similar to SBUX, I have a $10,000 stock position in WBA, of which $2,560 has been offset by selling options in WBA alone over the last few years. This is not counting reinvested dividends which would bring my cost basis down even further. With WBA reporting earnings on March 28, there's nothing to do but to sit on this trade for the next 9 days. Once again earnings will proably be a deciding factor in whether or not I'm still in this trade in 2 weeks. If this sounds familiar because the exact same situation happened in October last year, which is great because past experiences can provide great ‘templates’ to follow in the future - which is what I'm doing here. You can read about last year's trade at the link below.
That's it for this week - I know I mentioned there were a lot more new positions put on but there just isn't space in this newsletter to share all of them. I also may not share trades that are still viable because obviously that's what people in my private community and course pay for - I do want to preserve some value in my paid offerings. If you already have an understanding of how to sell options and would like to get trade updates in real time, check out the Bread Crumb subscription link below.
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.