June 2015 is almost in the books which means its time for my monthly options trades update. June marks the third month I have been selling options. I’ve made a couple mistakes and but nothing I cannot live with. Selling covered calls and cash secured puts is a great way to increase ROI and on occasion buy stocks on the dip. Additionally an options strategy is a great way to get more money for investing. By simply selling what amounts to insurance policies I have been able to make money. In May, I sold 15 contracts for a profit of $1,366.38. This month I sold 8 options trades for a profit of $1,230.32. In the three months I have been selling options I have made $3,797.70; which is being used as future investment cash in my Investment Hunting portfolio.
Of the 8 options trades I made in June six were covered calls and two were cash secured puts. One of my calls was assigned, which means I sold 100 shares of AMGN for $15,500. On paper this looks like a loss because I bought AMGN a month previous for $162.50 or $16,250. I sold covered calls on AMGN last month and this month so I actually made money on this stock, but not much.
I chose to sell an options contract on AMGN at $155 because if the contract executed which it ended up doing I think I can recapture it at a later date for a lower price. The chart below shows every contract I sold.
I sold six covered calls: AMGN at $162.50, AMGN at $155, COP at $64, NOV at $50.50 and CPA at $90. As mentioned AMGN at $155 executed, so my shares were sold off. Nothing to worry about, this freed up my cash account and I immediately sold a put on AAPL.
Cash Secured Puts
I sold two cash secured puts: UNP at $99 and AAPL at $126.
Options Trades – Next Steps and Takeaways
For the month of July I plan on slowing down on my options trades. I use options primarily as a way to earn extra money for investing. By this I mean, although I am happy if a contract executes, I am more happy when contracts expire worthless and I get to pocket the insurance money. The market has been pretty volatile lately and with interest rates fears and A Greece default, I suspect this trend will continue. I will only sell options trades on those stocks where the value is exceptional, this way if a contract exercises I get a fantastic deal on a great stock.
What are your thoughts on options trading? Do you trade options?