How Are Members Made Over $1500 on 1 Stock in less than 5 Months
October 9th, 2020
We booked one more winning Options Income Blueprint trade this week on glassmaker Corning (GLW).
This was a rolled position that beautifully demonstrates how effective a rolling strategy can be for options sellers.
On Sept. 16, with GLW trading at $33.22, we sold a GLW Sep Week Four (9/25) 32.50 Put for $0.41, or $41 per contract. While that may not seem like a lot of cash, consider that we only needed to put up $3,250 in capital per contract.
So, if GLW had stayed above $32.50 and our put had expired worthless, we could have earned a 0.9% return on that capital in 10 days, or 32% on an annualized basis, which is a very health rate of return.
However, shortly after we entered the position, the stock sold off with the broader market. On the day before our put was set to expire, GLW was about 5.5% below our put’s strike price.
Rather than allow ourselves to be assigned shares, I recommended that members roll to the GLW Oct Week Two (10/9) 32.50 Put to buy more time for the stock to move higher. I say “buy” time, but we actually got paid a small credit to roll. We picked up another $8 in income, bringing our cash in hand to $49.
It just so happened that the stock made a short-term bottom that day and reversed higher. Over the next two weeks, shares shot up almost 15%. This gave us the opportunity to ladder up our put — i.e., roll to a higher strike price — simply to generate more income.
We rolled to the GLW Oct Monthly (10/16) 33.50 Put, adding another $23 to our cash in hand. And when we closed the position one day later, giving back just $12 per contract, we booked a $60 profit, earning 1.8% in 23 days, or 29% on an annualized basis.
As I often say to Options Income Blueprint members, rolling works!
I was a fan of Corning long before the coronavirus pandemic, but the race to produce billions of medical-grade vials and syringes to hold a vaccine has given me a new reason to be bullish on the stock. The company received a $204 million government contract that it is using to accelerate construction of a furnace that will be used in the production of vaccine vials.
We’ve traded GLW eight times since early May, racking up eight winners with one breakeven trade. Below is a brief rundown of those trades:
Members who sold just one contract of each of these trades could have earned $306 in income in the past five months from this stock alone.
As you can see, some of the trades were closed after just two or three days, resulting in triple-digit annualized rates of return.
Not that the rates of return on the longer-duration trades are anything to sneer at. In fact, all but the breakeven traded exceeded our goal of making 0.5% a week, or 26% annualized.
In short, GLW has turned out to be an income-generating machine for us, and I don’t see that changing anytime soon.