My naked put investment in AAPL from 1/4/13 when the stock was at $533.32
The stock is down almost exactly 20% since that time. So how has my investment fared?
As posted on this board in real time, my investment was to sell 4 of the 350-strike naked puts expiring in Jan. 2014. I received $1,302 apiece on sale or $5,200 after commissions. Cash margin requirements at TD Ameritrade came to $19,220 which is the amount of the investment.
Even though the stock is down 106 points since then, support has been found on two occasions in the $390 area and bears are quickly losing hope that the stock will go below $350 by January expiration. Consequently, the options that I sold for $1,302 each can now be bought back for $735 bid. Including commissions, it would cost $2,950 to now buy back options that fetched $5,200 just over six months ago. The profit of $2,250 on a $19,220 investment amounts to 11.7%. Not a bad little return - almost 2% per month for a stock that has tumbled by 20%.
If anyone doubts that I utilize superior methods, they just have to look at this investment. I'm up by 11.7% on my AAPL investment whereas buy-and-hold investors are losing 20%. WHAT A DIFFERENCE!
Is it any surprise that I have the returns that I do when I can earn at the rate of almost 2% a month even when the underlying stock is tumbling by 20%?
My amazing Eureka moment from almost two years ago has made me just about the very best percentage wealth creator in the land.