Trade Results - AT&T
Trade Results - AT&T (T) Hello Smart Option Sellers! We were able to get filled yesterday on the AT&T buy-back order at our price of $.15 per contract. The stock fluctuated throughout the day, which allowed the put option to move in range for us at various times. Here's what we did: Bought-back (bought-to-close) all of the T January 2018 $31 put options for an official buy price of $.15 per contract as a closing transaction (bought-to-close). As mentioned yesterday, I didn't want us getting caught in any potential downdraft of the stock price due to the DOJ trying to block T's merger with Time Warner. I'd rather have a clean break with the trade, albeit with a small profit, then have to deal with the uncertainty of the merger. There's no way to tell how long the court battle would be, and we could have theoretically held on until our January 2018 expiration date, but that's still keeping us on edge for two more months. I'll pass. So with that, we closed it out. Here's the results: We originally established (sold-to-open) this put option on 8/31/2017 for a sale price $.26 per contract, and now we took gains by buying it back (bought-to-close) for $.15 per contract. With the fill at $.15, it locked in a gain of $.11 per contract ($11 per every contract traded) and a return on margin (ROM) of roughly 1.8% in under three month's time. We'll typically wait until we can buy the option back when it's hit my "80% Rule" threshold, but this was under different circumstances. Taking gains at the 80% threshold would have also given us better returns too, but I'd rather be safe than sorry on this one. If you have not been filled yet on this buy-back trade, just keep your order working "GTC". Bitcoin Update Got an interesting question from a reader about bitcoin. Q: Lee, I've been reading about options trading on bitcoin, can you fill us in on anything you know? Thanks! A: Absolutely! If there was one thing I was hoping to hear about bitcoin - was that there would be option trading available. Do you know how lucrative it could be if we can trade options on this thing? Super lucrative! Here's what I know: I've been writing about bitcoin lately here in the alerts. Since the last time I gave everyone an update, bitcoin has hit yet another all-time high yesterday near $8,375 per coin. Just nine days ago on November 12, it hit a low near $5,500 per coin, and has rallied up to $8,375, jumping almost $3,000 per coin. That's a gain of roughly 52%. The gains bitcoin makes on a weekly basis is just insane. Getting back to the option's trading on bitcoin... As of now, there is only one place where you can trade options on bitcoin that has actual regulatory oversight, and that's on the Ledger X Exchange. Unfortunately, not every individual investor can participate at this time. You have to be an accredited investor or institution to be able to open an account at Ledger X, which mostly leaves all of us out - for now. One of the most recent and interesting trades that took place on Ledger X was for the $10,000 strike call options for the December 2018 expiration date. The buyers of that option paid $2,250 for it. You can read about the trade here. I think that's a great trade. With bitcoin at $8,200 as I type, the buyers have 13 months for bitcoin to surpass the break-even price of $12,250 per coin. Heck, the way bitcoin is going up, it might hit $10,000 by the end of this year alone. Next December 2018, it might hit $50,000 per coin. You all know I'm a huge proponent of selling options, but in the case of bitcoin, the only way I would play it once option trading becomes available to us is to buy long-dated out-of-the-money call options like the one I just described. Talk about having the opportunity to hit the motherlode! Anyway, in addition to Ledger X, the Chicago Mercantile Exchange (CME) has just gotten the go-ahead to list bitcoin futures contracts. They hope to start trading next month (December 2017). This will be the most mainstream, fully protected, and regulated futures trading of bitcoin that can really take it to the next level. This will also bring institutional interest to the table, and once these big boys get onboard, who knows high how bitcoin can go. And as long as the futures market for bitcoin gets off the ground, options trading won't be far behind. And not to be outdone, the CBOE has also set the stage in motion to get bitcoin contracts listed on their exchange too. At that point, ETFs will come right up behind with options trading available as well. I'm getting all kinds of crazy excited for these opportunities! Having major institutions such as the CME & CBOE list bitcoin for trading just shows you the legitimacy that it's starting to get. I really don't see it turning back at this point. As of now though, you can still only buy or sell bitcoin and other cryptocurrencies through exchanges like Coinbase.com and Bittrex.com I've given you the head's up and full disclosure that I'm investing in bitcoin myself, and that I am not giving any kind of official recommendation to do the same. You can invest in it if you wish, or not. But I highly suggest you take a little bit of your most speculative "fun" money and buy some bitcoin. It's a game-changer for sure. If you want to grab a stake, you can sign up at Coinbase.com Use this referral link to get started. If you do, we both will receive $10 worth of free bitcoin after you've bought your first $100 worth. Don't forget, if you do open an account, make sure you use a very long & intricate password. And sign up for the "Two-Factor Authentication". This is just another layer of protection for your account. It will send you a 6-digit code to your phone to use for logging in purposes in addition to you typing in your password. Ok, that's all for now. Continue to hold all other trades as-is. Check the Current Portfolio below for updates & instructions. I want to wish everyone a super enjoyable Happy Thanksgiving tomorrow (if you partake). Watch some football, eat a lot, and be a couch potato! That's what I'm looking forward to! I'll talk to everyone again next week. You can always reach us here
Regards, Lee Let's Grab That Cash!