Profit Results & Trade Updates

Profit Results

Hello Smart Option Sellers! Procter & Gamble (PG) Profits are locked in on PG. We were able to get filled yesterday at our buy-back price of $.04 per contract. Here's what we did: Bought back (bought-to-close) all of the PG October 2017 $65 put options for an official buy price of $.04 per contract as a closing transaction (bought-to-close). We originally established (sold-to-open) this put option on May 4, 2017 for a sale price of $.22 per contract, and now we took gains by buying it back (bought-to-close) for $.04 per contract. With the fill at $.04, it locked in a gain of $.18 per contract ($18 for every contract traded) and a return on margin (ROM) of roughly 1.4% in just about three month's time. If you like to annualize, that's roughly a 5.6% return. If you are really following the numbers here, you can start to see how the ROM is higher when we use lower priced stocks, and the ROM is lower when we use higher priced stocks. This is just a function of the margin requirement. It doesn't take away from the actual dollar gains though. Here's how the margin calculations break down: Whenever we sell an option contract, your broker requires you to maintain a "margin requirement". The margin requirement is just part of your account funds that need to be held aside while the trade is active. You are not borrowing money from anyone nor are you paying margin interest to anyone. The margin requirement is typically 20% of what it would cost to buy 100 shares of the stock at the strike price. In this case: 20% x $6,500 = $1,300. Your margin requirement at your broker may b