September options expiration: Naked puts on JPM, KFT, DO & more

This week was another options expiration and another “payday” as I collected premiums on expiring naked put options that I’d sold earlier this year. I also recently initiated some new naked put option sales – in the technology and financial sectors – which I’ll detail in another post when I have more time.

In terms of the short put option positions that expired this week, I could have collected most of the profits weeks or months ago (which would have boosted the reported precentage returns) but since I didn’t need to free up capital I chose to avoid commission costs and let them run out. Percentage returns aside, the raw income produced from these sales provided a nice boost to my account’s bottom line.

Options expiration results:
Cenovus Energy [[CVE]] – The September 20-strike put options I sold against CVE on 2/25/10 expired out-of-the-money (OTM) for a 7-month net return of about 5.5%.*

Diamond Offshore [[DO]] – The September 40-strike put options I sold against DO on 6/8/10 expired OTM for a 3-month net return of about 3.8%.*

NextEra Energy (formerly FPL Group) [[NEE]] – The September 40-strike put options I sold against NEE on 1/22/10 expired OTM for an 8-month net return of about 2.6%.*

J.P. Morgan [[JPM]] – The September 30-strike put options I sold against JPM on 1/21/10 expired OTM for an 8-month net return of about 3.3%.*

Kraft [[KFT]] – The September 25-strike put options I sold against KFT on 1/21/10 expired OTM for an 8-month net return of about 3.7%.*

Nustar Energy [[NS]] – The September 50-strike put options I sold against NS on 1/29/10 expired OTM for a 7-1/2-month net return of about 4.7%.*

Williams Partners L.P. [[WPZ]] – The September 30-strike put options I sold against WPZ on 1/22/10 expired OTM for an 8-month net return of about 4.7%.*

* As always, the return on sales of cash secured or naked put options was calculated 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).

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