Profit Results And Friday Q&A

Profit Results

Hello Smart Option Sellers! Happy Friday. We made it through another week. And it was a good week here at The Smart Option Seller. We've seen a number of profit-taking opportunities of late and we've just been filled on two more yesterday. Let's go over the results. Intel Corp (INTC) We were able to easily get filled on the INTC buy-back trade at $.04 per contract, a penny better than my recommended price of $.05 per. Here's what we did: Bought back (bought-to-close) all of the INTC October 2017 $28 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 June 28, 2017 for a sale price of $.25 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 $.21 per contract ($21 for every contract traded) and a return on margin (ROM) of roughly 3.75% in about five week's time. If you like to annualize, that's roughly a 38% return. 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 $2,800 = $560. Your margin requirement at your broker may be slightly higher or lower. Ask th