Options expiration (June): Naked puts, covered calls in STD, DO, TEF, EPD & more
This month’s options expiration was typical of most from my perspective as an options seller. It was yet another “payday” as I “closed the books” and officially collected the option premiums on the expiring naked put options and covered call options that I’d sold months earlier (see details below).
Meanwhile I’ve also been busy initiating more new naked put option positions as market weakness – and a corresponding rise in volatility – has been presenting new opportunities. I’ve gotten a bit behind on posting updates on new options trades, but plan to do so as soon as I catch up on various matters.
Options expiration results:
Banco Santander [[STD]] – The June 9-strike put options I sold against STD on 11/8/10 expired out-of-the-money (OTM) for a 7-month net return of about 6.9%.*
Diamond Offshore Drilling [[DO]] – The June 59.25-strike put options I sold against DO on 11/16/10 expired OTM for a 7-month net return of about 7%.*
Enterprise Products Partners L.P. [[EPD]] – The June 43-strike covered call options I sold against my long position in EPD on 10/28/10 expired OTM for a 7-1/2-month net return of about 3.6%.
Getty Realty [[GTY]] – The June 20-strike put options I sold against GTY on 3/2/11 expired OTM for a 3-1/2-month net return of about 4.6%.*
Hospitality Properties Trust [[HPT]] – The June 20-strike put options I sold against HPT on 11/9/10 expired OTM for a 7-month net return of about 6.6%.*
Telefonica [[TEF]] – The June 23.33-strike put options (adjusted from $70 due to a 3:1 stock split) I sold against TEF on 11/10/10 as part of a rolling-up and out of an earlier position expired OTM for a total 15-month net return of about 9.7%.*
* As always, the return on sales of cash secured or naked put options was conservatively calculated based on the option premium received from the sale of the options (minus commissions) against the unmargined capital set aside to pay for the possible option assignment (i.e., my being put the shares of the underlying stock).
