On Jan. 29, 2013 when JCP was at $20.75, I sold 100 of the Jan. 8-strikes for an average of $55.50
Net proceeds after commissions were $5,480 and cash margin requirements at TD Ameritrade amounted to $13.900.
Today, the stock is going for $18.73 which is 10% LOWER than when I initially got involved. So how has my investment fared?
Well, the current bid is $18 per contract and the ask is at $21? If I were to buy them back at the asked price, I would pay $2,170. That would leave me with paper profits of $3,310. The nominal return for 17.8 weeks on the $13,900 investment is 23.9%. Annualized, that's 78.4% which is a heady 6.5% return per MONTH.
Mind you, that return is with the underlying stock LOSING 10%. So I'm profiting by almost 24% while buy-and-hold investors are losing 10%.
There is simply nothing in the investment world that produces the kind of returns that selling deep out-of-the-money naked puts at Ameritrade does. I am routinely able to take what for others are losses such as in JCP and turn them into big profits.
There's no need to keep wondering if the returns that I show in my updates are true; I continually demonstrate just how true they are. As is my wont, I post every single transaction in real time; I don't simply go back after the fact and claim gains.
Because I walked away from an auto accident that I shouldn't have survived 12 years ago, I feel compelled to pass on my colossal discovery to others. Otherwise, I'd be keeping it to myself because the more people that know about this, the lower prices I myself will receive on the sales.