Hello! Lots of stuff to get through this week:
1) All trades & profits in August
2) ABBV trade turns into an (unrealised) loser
3) JNJ trade update
Let’s go!
All trades & profits in August
A record month for 2022 with $2,696 in realised profits this month. I managed to capture 72% of max profit, which is on the high end of my usual target of 50% - 75%.
The trades are detailed below - if there’s an (R) that indicates that it was previously a losing trade that I rolled.
This could have been a lot more if I had left Best Buy (BBY) to run until expiration, but I detailed why I chose to give up $400 and close the trade instead last week.
The good news is that after these trades are closed, I have no more rolled trades, ie the portfolio is not carrying anymore old losing positions!
The bad news is one of my current trades has just turned into a losing position…
ABBV - a new losing position
About a month ago I put on this trade in ABBV together with PG and KMB as part of a trio of trades in solid dividend-paying companies who got a bad reaction to their earnings.
PG & KMB have already been closed for a profit, but ABBV has continued to struggle.
I sold the $135 put expiring 16 Sep (Circle 1) for an initial premium of $2.05 (Circle 3), while the option is currently trading at $2.45 (Circle 2).
So if I were to close this position now, it’s a $40 loss (remember to multiply by 100, because each contract is 100 shares).
It’s important to note that even though the option price is showing a loss, ABBVs stock price is $136.35, which is still above the strike price of $135.
This is what we want. As long as ABBV stays above $135, this is still a winning trade.
However, with 19 days to go, there’s still quite some time for the stock price to ping pong around, and since I can’t close this trade for a profit, I will leave it and see what happens.
As we begin to hit the 7 - 14 day window, this trade will need to be managed one way or the other.
JNJ trade update
Finally, a JNJ trade update.
I sold the $160 put expiring on 16 Sep for $1.45, it’s currently trading at $1.34 - neither here nor there.
This of course was a much more profitable trade last week when I could have locked in a 45% profit.
But this trade is slightly different from the rest because I’m actually trying to pick up some shares of JNJ at a discount.
It’s still $4.27 away from touching my strike price of $160, so I’m quite comfortable leaving this on to sort itself out.
Thanks for reading! We had a big down move on Friday thanks to Jerome Powell’s comments. I’m hoping that leads to some volatility this week, which will lead to some opportunities to put on new trades!
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 dilligence before investing in stocks or options.