Smooth Sailing With Options

I’ve been doing this options thing a long time, and I’ve had my failures. But I’m a firm believer in the method and so I want to share a failure with you and how it ended up.

Back in December 2020 I started selling puts on DIS. (Left hand green arrow on the chart)

But I had been selling calls since I was assigned. So today I went back and added all that premium up. I did not add the puts I had sold previous to getting assigned so actually my numbers are slightly better than these calculations, but this is close enough.

All those calls, and I was fortunate that none of them were assigned underwater, added up to $65.80 worth of premium. So my original $190 cost basis was reduced to $124.20. DIS earnings came out after close today, February 9th 2022, and they were good so DIS went up after hours about 7% to $157.45. (Yes the chart says $147.23 but that is the 4PM close price.)

So now I’m back in the green. $157.45 is 26.7% above $124.20. So while it took me a year of working it, and my stock is still down $32.55, if I closed out tomorrow at $157.45 I’d be up 26.7% for that year.

That, I think, is the beauty of what we’re doing and why selling options is the bomb.

Also, spring is coming, again, so maybe Disneyland and the cruise ships will actually pick up. Price targets on DIS are back up to around $170-$190. So with any luck there is more profit to be made here.

Happy trading!

0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *