Insight on how to earn a steady income from selling options.
Step 1. What I plan on buying in the next go around.
Step 2. What I actually ending up buying from step 1.
Step 3. Current and closed out positions.
Step 1.
Possible Trade 7. Sell 1 Naked SPY put (strike 300, date Aug. 21, 2020, underlying price ).
Possible Trade 8. Sell 1 Naked IWM put (strike 135, date Aug. 21, 2020, underlying price ).
Possible Trade 9. Roll 1 call to IWM (strike 135, date Aug. 28, 2020, underlying price ).
Possible Trade 10. 1 buy/write PM (strike 72, date Aug. 21, 2020, underlying price ).
Step 2.
Previous week Step 1. “Next week I hope to buy another IWM call/write and another PM Naked put. I plan on having three positions of both IWM and PM with each having one position expiring each week. I have been doing this for a few months so technically this has already been established however, for this series I'm leaving past trades out.” “I added an option spread strategy to the mix because it is also no longer then three weeks in duration. That would be the option spread indicated below. I've had good luck rolling the short term SPY put each week or two. Hopefully I will be able to do this next week as well.”
Trade 4. Sell 1 Naked SPY Put (strike 300, date 8/15/2020, underlying price 322.29) for $130
Trade 5. Buy/write IWM (strike 135, date 8/15/2020, underlying price 146.46) for 14604/1213
Trade 6. Sell 1 naked COP (strike 35, dated 8/21/2020, underlying price 39.52) for $48
Note: PM premium remained too low. Switched to COP.
Step 3.
Trade 1. Bought 100 shares for $14327. Sold 1 Aug 7 Call @ strike price 135 for $1213. Max profit Potential $109. (Stock market price 146.04) (Buy/Write).
Trade 2 Closed. Sold 1 PM Aug 7 Put @ strike price 72 for $55. Max profit is $55. (Stock market price 76.10)(Naked Put). Bought at $12.
Profit $43
Trade 3 Closed. Sold 1 SPY Aug 7 Put @ strike price 300 for $113. Bought 1 SPY Jan 21 2022 Put @ strike price 260 for $1700. Max profit $113 (Stock market price 324.87) (Option Spread). Bought at $59.
Profit $71