How Our Members Made $456 This Week
August 28th, 2020
We sold a put on the stock in early June and rolled it a few times after the stock moved against us before accepting shares in late June. When we were assigned, our cost basis was 12% above the stock price.
While I hate taking losses as much as I’m sure you do, I am willing to walk away from a loser if the fundamental story for the stock has changed. But I am loathe to take a loss on a stock that I believe in, preferring instead to manage our way back to breakeven or profitability.
While we had a pretty decent size hole to dig our way out of with BAC, dig we did, and after two months of selling calls to bring in income and lower our cost basis, we closed the position with a 0.9% return in 81 days, or 4% on an annualized basis. I’ll take that over a loss any day!
This trade was a great example of how to manage an underwater position.
Factoring in the profit we made from the BAC trade — $24 per 100 shares — Options Income Blueprint members could have booked a total of $416 in income for the month of August.
Here’s a quick rundown of August’s winners:
Scanning the list, you’ll notice some familiar names. We’ve been generating a ton of cash this year by trading favorites like Corning (GLW), Advanced Micro Devices (AMD) and Chewy (CHWY).
There are also some new names on the list such as Tractor Supply (TSCO) and Blackstone Group (BX) — two stocks I hope to continue trading in the months ahead.
Next week is shaping up to be a quiet one, with no positions set to expire until the Sept. 11 expiration. But I expect it to be an active fall as we look to take advantage of still-elevated volatility levels that are resulting in large premiums on the best income stocks.