Profit taking in the long-term naked put-writing portfolio
Bought back 80 contracts of the CSCO Jan. 13-strike naked puts for $5 apiece or $400 after commissions. These once-rolled-out options had been sold for $153 each on 6/1/12. Net profits after commissions amounted to $11,795 on the $22,960 investment for 13.5 months.
The original CSCO investment involving 15-strike naked puts dated back to 4/3/12 and resulted in a loss of $7,325. So from that original inception date for the underlying stock, I would up with net profits after commissions of $4,470. Nominal percentage gains for 15.5 months were 18.9%. So even though I had to roll at a big loss last year, I STILL ended up in the fullness of time with a double-digit annualized gain.
Since I had my Eureka moment almost two years ago, I have not ended up with a single loss in an underlying stock in the fullness of time and this was no exception.
07/17/2013 12:28:00 Bought 80 CSCO Jan 18 2014 13.0 Put @ 0.05 -401.92
Here is a re-post of the June 1, 2012 transaction where I sold 80 contracts of the CSCO 13-strike LEAPS puts out to Jan. 2014 for $153 each. I just bought them back earlier this morning for $5 each. As always, the original transaction was posted to this board in real time.
06/01/2012 14:22:43 Sold 80 CSCO Jan 18 2014 13.0 Put @ 1.53 12,194.76