Trade Update - Verizon

Trade Update - Verizon (VZ) Hello Smart Option Sellers! Many of you were successful yesterday taking profits on the buy-back order on the VZ put-sell position. Here's what we did: Bought back (bought-to-close) all of the VZ April 2018 $35 put options for an official buy price of $.06 per contract as a closing transaction (bought-to-close). If you have not been filled yet on this buy-back trade, just keep your order working "GTC". It will only be a matter of time until you are filled. Here are the profit details: We originally established (sold-to-open) this put option on November 7, 2017 for a sale price of $.26 per contract, and now we took gains by buying it back (bought-to-close) for $.06 per contract. With the fill at $.06, it locked in a gain of $.20 per contract ($20 for every contract traded) and a return on margin (ROM) of roughly 2.8% in just six week's time. Nice and short. Just the way we like it! If you like to annualize, that's roughly a 24% return. To understand how the margin works and the calculations involved, here's the breakdown: Whenever we sell an option contract, your broker will require you to maintain a "margin requirement". The margin requirement is made up of funds that are already in your account and will need to be held aside while the trade is active. You are not borrowing money from anyone nor are you paying interest to anyone. Some people can confuse the margin requirement with "trading on margin". They are completely different things. We are not trading on margin when selling put options. 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 $3,500 = $700. Your specific margin requirement at your broker may be higher or lower than that. If you are unsure, just ask them. So for this trade, our margin requirement is $700 per each put option contract sold. Our profit on this trade turned out to be $20 per each put option contract sold. Hence, the return on margin (ROM) comes out to $20/$700 = 2.8%. Also, the fill at $.06 allowed us to capture 77% of the full profit potential ($.20 gain/$.26 full potential = 77%). When selling options (puts or calls), your full profit pot