February has been agonisingly slow, although it looks like volatility is picking up a little bit. Sadly the increased volatility hasn't spared my JNJ position, so it's finally due for a roll.
This week:
Rolling the Johnson & Johnson position
New trade in SCHD
February wrap up
Rolling the JNJ position
Well I waited for as long as possible to give JNJ every chance of recovering, but by Thursday morning it was clear that the trade needed to be rolled. I bought back the previous put and sold a new $160 put expiring Mar 31 for $1.41 net credit, bringing the total credit for this trade to $2.33
There was the possibility of rolling down to the $155 put, but the additional credit was something like $0.20, which I didn't feel was worth it. We'll see if this comes back to bite me! Honestly getting assigned on this trade wouldn't be the worst thing in the world. JNJ is lower that it's been for the last year and I collected over $2,000 in premium in JNJ in 2022 alone, which will go a long way in reducing my overall cost basis. If you missed last week's thought process on the various ways I was thinking of managing this trade, check out the link below.
New trade in SCHD
That's right, SCHD is back in the portfolio! I sold a $71 put expiring Apr 21 for $0.67 credit and I would love to be assigned on this position. I already own 100 shares of SCHD at $77, so buying another 100 shares at $71 will lower my overall cost basis to $74 per share, which is great.
Because I'm open to the idea of being assigned on this trade, I'm not putting in an order to close the position at 50% profit like I usually do. However if I can buy it back for maybe $0.15 I will, just because at that point I would prefer to take the risk off the table and redeploy the capital into another trade. Surprisingly I had to go all the way back to October for my last SCHD trade. I probably should make a note to try to keep it in my portfolio as much as possible - of course only if I can pick it up lower than my original cost basis. If you're interested in finding out more about my earlier SCHD trade, click on the link below.
February has been the slowest month in a while, but that's the nature of selling options. I don't believe in forcing trades if there aren't any, and other months will make up for February. PG - $37 profit SBUX - $55 profit Total realised profit = $92. There's still 2 trades outstanding and hopefully they'll be profitable in March and we can lock in more profits. Still, anyone who signed up for the Bread Crumb subscription could have made nearly 2x their money this month - more if they entered more than 1 contract at a time.
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.