Happy October!
Once again I've had more trades to update in September, so I'm pushing the monthly update a week later to next Sunday.
This week:
$140 profit in Caterpillar (CAT)
$130 profit in Texas Instruments (TXN)
$140 profit in CAT
CAT didn't start September strongly, which allowed me to sell the $310 cash-secured put expiring Oct 18 for a premium of $275 upfront.
Just 10 trading days later, CAT (and the rest of the market) rallied, hitting my profit target and I paid $135 to close the position.
My realized profit was $140, or about 51% of max profit.
In my update to my private community I half-jokingly said that I was thinking of moving my profit target to get more ROI from the trade, but my closing order got hit immediately when the market opened to close the trade before I got a chance.
And that's exactly what the system is meant to do. Take profits automatically and prevent greed from intervening.
The truth is I've seen too many trades go from winners to losers because I held on too long to try to squeeze more from the trade, so closing orders really help me with being disciplined about taking profits.
I don't trade CAT that often because of its relatively large notional value, but still, CAT has brought in $615 in realized profits with 4 wins from 4 trades.
If you'd like to check out my private community for updates within my real options portfolio, check out the link below.
$130 profit in TXN
A while ago I sold a $180/185 put ratio expiring Sep 20 in TXN and received $130 in credit for the trade.
This was placed during one of the live coaching sessions from my course, and was a good opportunity for me to place a live trade with real money to demonstrate how it works for the people in my class.
Put ratios are great because they require very little management. They're usually left all the way to the last week before expiration before anything needs to be done.
Similar to the MSFT trade that I shared last week, eventually both trades expired worthless, which means they both closed for 100% of the initial premium of $130.
As you can see from the screenshot, this trade was basically a twin of the MSFT trade that I shared last week, right down to the profit numbers.
Making 100% profit from 2 trades is a nice win.
Like I said last week, the nice thing about put ratio spreads is that generally you get one of two good outcomes - the position expires with 100% profit or you actually make more money.
You can read about the twin MSFT trade at the link below.
Closing thoughts & useful links
The market got another boost this week in the form of strong non-farm payroll numbers. The CPI reading is going to be released next week and if it shows inflation coming down, we could see the rally extend even further.
Obviously as an option seller that's not ideal, but there's little I can do to control the overall market conditions - what I can do is focus on getting the best trades available at any point in time.
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.