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Wow what a wild rebound from last month. Who the hell saw this one coming?
This last few weeks I sold 6 Put contracts which all were able to bought to close for profit for around $1400 total. I also sold one call, which of course got assigned for $3200 profits.
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Week 44:
QQQ540P: Sold to open for $214 and bought to close for $62. This was the last day of march before the market started its reversal on April 1st. It went down 70% the next day so I closed the position.
4CRCL75P: Sold to open for $100 each and bought to close for $25 each the next day over the weekend.
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Week 45:
SPY630P: Sold to open for $304 and bought to close for $21 also the next day. I still wasn't sure if the market was reversing at that time, so thats why I decided to be cautious.
INTU vs MU
Now after the market reversed it gave me tariff crash recovery vibes so I started to consider individual stocks are worth it again.
I was debating if I should buy the dip on a stock thats been weak, or just follow the pump on a stock that has been strong.
I noticed INTU and MU diverged in their charts from July last year. INTU was down 50% from its high, while MU was up 500% from its low.
So I did both and decided to sell a 350P on each of them whichever one wins I'll go into that.
Of course the stock thats been pumping just kept ripping and the stock that was dumping got eviscerated even more.
So I took the profit from the MU 350P, fomo'd into shares around $420 and sold a 450C. Then it kept running and my shares were assigned. I honestly felt like I was being rewarded for being a dumb fomoer.
Meanwhile my INTU put was getting smashed. I sold it for $360 and at one point it went over $1600. I was lucky to get out of there and bought it back for $205 when it bounced. Even though it was only 40% profit from my cost basis, it was down 85% from its peak price, so I thought it was a good idea to exit early.
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Week 46:
MU420P: Sold for $434 and bought back for $65. After getting assigned and making much higher than average profits, I kept it chill and tried the wheel to see if I could get my shares back where I bought them the first time.
Imagine my surprise when the shares continued going higher to $475. So I took my profits around 85%.
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Delta and Theta
Since many people ask, I have been starting to take notes of the Delta and Theta values when I open the positions.
4/6
qqq540P Delta .15 , Theta .45
4/10
4crcl75P D .15 , T .17
4/14
spy630P: D .195 , T .52
4/17
intu350P: D .19 , T .55
mu350P: D .11, T .54
mu450C: D .23, T .86
4/24
mu420P: D .18, T .81
All of the contracts had a higher Theta value than Delta value, which is what I usually look for.
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Charts
None of this is technical analysis or predicting the stock price based on past movements. I just draw the yellow line at the stock price I sold the position and it ends at the breakeven. This shows a simple visual trajectory the stock has to take in order to reach assignment.
Most importantly this last few weeks you can see almost all the cash secured puts were opportunity cost losses. The green dotted line is my max possible gain for cash secured puts. If I just bought the shares, or even in some cases bought calls, I would have made a significant amount more.
Thats ok for me though. I mainly just don't want to lose as much if they go down. Ok yea it kind of stings a little bit, so I try not to dwell on it too much, and just find contentment in my beer money gains.
Also I thought it was funny my covered call the shares ended up right at breakeven. Like literally within pennies. Pretty rare for that to happen.
I find getting OTM calls getting assigned to be a successful trade.
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Closing Statements
Mostly, I really feel like I'm getting lucky this market keeps bouncing. Seems like it might be theta season for the rest of the year just like last year again. Who knows.
Anyway, thanks for reading. Feel free to ask any questions in the comments. I'm open to advice or criticism. Or anything you want to say.
Good luck out there. See you next time.