I’ve just completed my second sets of weekly trade. Complete results of the trade are as follows:
Sell-To-Open 1 contract AAPL MayWk1 570 P @ 1.83 = expired worthless; this trade brought $183 cashflow to my account.
Sell-To-Open 5 contracts MSFT MayWk1 40 P @ $0.19 = expired worthless; this trade brought $95 cashflow to my account.
Buy-To-Open 5 contracts MSFT MayWk1 38 P @ $0.02 = expired worthless; this trade cost me $10.
Sell-To-Open 2 contracts V MayWk1 195 P @ $0.55 = expired worthless; this trade brought $110 to my account.
Buy-To-Open 2 contracts V MayWk1 190 P @ $0.31 = expired worthless; this trade cost me $62.
Total cashflow generated = $183 + $95 – $10 + $110 – $62 = $316 for my 2nd weekly trade on $5.000 account.
As MSFT price is below $40 per share at close of the market hours, I got assigned 500 shares of MSFT at $40 per share. My cost basis on this position is actually $40 – $0.19 = $39.81 per share. I’m looking to generate cashflow through the 2nd phase of my method using covered call strategy on the stocks I owned. The cost basis will be used to determine the strike price selection.
My other AAPL long put is still open. I’m looking to recoup some of the premium spent on the trade using calendar spread next week. My initial stance on this trade is bearish, but AAPL seems to gain bullish momentum, just outside the upper Bollinger Bands. In theory, this only happens 5% of the time; but the market can remain irrational much longer than your standing by your opinion. So, I’ll start to recoup some of the loss I endure on this position by selling theta.