I just wanted to make a post, regarding the SSO options trade, that I made and posted earlier this week. The SSO is the ultra etf (2x bull) on the S&P 500. I wrote 10 naked $15 put options on this for March, at $0.45 per contract (total proceeds collected was $450). If you followed me on this trade, you have 2 options going into options expiration, next week.
Option 1: Options expiration is next Friday and currently the SSO is at $17.85. If you are feeling bullish, you can hold this until next Friday and have a free $450; however, the SSO cannot closed below $15.
Option 2 (my plan): I will cover the SSO Naked puts in the morning, by buying 10, $15 SSO March puts at $0.15 per contract (total value of $150). That will fufill the obligation and leave me with a 66% gain and a $300 profit.
The SSO would have to drop 16% for the Option 1 to fail; however, with the volatility and uncertainity in these markets, I will give up $150, to make book a $300 profit.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment