[Video] Watch Us Book Profits On Options Expiration Day
Hi. Phil Ash here, publisher of Investing Daily. In my article below, check out a typical options expiration day with numerous winners from Jim Fink’s Options for Income portfolio. See several put credit spreads being rolled or expiring out of the money for a profit. Also, see how we calculate returns on each of those trades.
You can also read a transcript of my comments below this video (and also find out more about how this strategy works.) Also, be sure to subscribe to our YouTube channel for some more quick-hit video trading action in the coming weeks.
June 16th was the third Friday of the month, which makes it my favorite day of the month…options expiration day.
In this video, I give you an update on my real-money portfolio that trades one contract on each of Jim Fink’s Options for Income recommendations.
For starters, you’ll see that among the trades expiring on this day, nine of his trades expired as winners, and three got rolled into additional trades so that they can either become profitable or become more profitable than they already are.
Let’s take a look at the particular trades in my account:
- NOW was trading at $569, well above the $450 strike price of the put option I sold. So, that trade expired profitably. I earned $330 per contract on a 10-point spread, which means I put $1,000 at risk. So, $330 divided by $1,000 minus $330 is a 49.3% return from April to June, roughly two months.
- DJX was trading at $139 with two hours to go before expiration, and it was trading comfortably above the $135 put option that I sold. So, that trade closed out profitably as well. However, it only had a $55 profit in it, which worked out to a 3.8% return on the initial trade. Jim therefore recommended a roll on this trade because he wants us to be profitable in double digits on every trade.
- NPS was trading at $444, well above the 370 put credit spread that I sold. So, this one also finished profitably (22.9%) on this options expiration day.
- YUM was trading at $138, well above the $125 put option that I sold. So, that trade finished out-of-the-money and profitably as well.
- And with the last two trades, I got assigned a few days prior, which means that I would be forced to purchase the stock. Some people get worried about that, but it’s not a big deal. That’s because put credit spreads involve the purchase of insurance in the form of a long put option. As long as you exercise your put option on the next trading day, you will not have to purchase the stock you got assigned. So, I did that and then rolled into a new trade per Jim’s recommendation. On one of the trades, I’m sitting on a $169 profit per contract and on the other a $353 loss per contract. I’m not concerned about the temporary loss because Jim gave his followers another trade to roll into and turn the overall trade profitable in time.
That’s a quick look at what’s going on in my portfolio following Jim Fink’s Options for Income advice on this third Friday of the month, options expiration day. Have a great day, and post a comment if you have any questions.
PS: Jim Fink has been sharing his trading secrets for over a decade. While the market tanked several times over the last few years, he hasn’t closed out a single losing trade. Click here to learn more.
This article originally appeared on Investing Daily.