Options trades and expiration: BP, AT&T, D & more!
This week’s options expiration held few surprises for me, as all of my short April put options were well out of the money going into it – and had been so for some time. I could have bought them back and realized almost 100% of the profits many weeks ago if I had wanted to but 1.) I didn’t have the need to free up the capital, and 2.) I didn’t wish to pay any unnecessary commission costs.
That said, I did take advantage of the ongoing low-volatility environment to close out early a May-expiration naked put option position in my IRA for a nice profit (see below). I also rolled out a covered call option position on a “loser” stock that I’m ultimately looking to weed out of my portfolio:
Closed/adjusted positions:
- Developers Diversified Realty [[DDR]] – On 4/5/10 I rolled out the April 12.5-strike covered call options I’d sold against my long position in DDR on 11/17/09 by buying them back (for a nice profit) and selling some October 12.5-strike covered calls for a nice credit. (This further reduces my cost basis – and potential loss – in the position if/when the shares are called.)
- Diebold [[DBD]] – On 4/7/10 I bought to close the May 25-strike put options I sold against DBD on 11/2/09 for a 5-month net return of about 4.8%.*
Options expiration results:
- BP plc [[BP]] – The April 45-strike put options I sold against BP on 09/24/09 expired out-of-the-money (OTM) for a 6-month net return of about 3.9%.*
- Dominion Resources [[D]] – The April 30-strike put options I sold against D on 10/1/09 expired OTM for a 6-month net return of about 3.5%.*
- Regency Centers [[REG]] – The April 22.5-strike put options I sold against REG on 09/3/09 expired OTM for a 6-1/2-month net return of about 7.1%.*
- AT&T [[T]] – The April 20-strike put options I sold against T on 09/1/09 expired OTM for a 6-1/2-month net return of about 4%.*
* As always, the return on sales of “cash secured” put options was based on the premium received from the sale of the options (minus commissions) against the unmargined capital set aside to pay for their possible assignment (i.e., my being put the shares of the stock).
