Profit Results - Oracle..Finally!
Profit Results - Oracle (ORCL)...Finally! Hello Smart Option Sellers! The elections are over... and Wall Street seems happy with the results. With congress now split between Democrats & Republicans, the chances of passing any major earth-shattering legislation is quite small. The markets tend to like the status quo which leads to less uncertainty. Hence, stocks are rallying big time today. I think this may be the end of the October correction and stocks now have the green light to continue the uptrend. We're seeing all of our positions move in the right direction again, and today we finally have closure to our Oracle put-sell position. We had initiated a profit-taking buy-back order on Oracle awhile back, of which about half of you were able to get filled. Since I wasn't content with calling it official until the rest of the gang was filled, we sat on the trade until today. I'm happy to announce that everyone has now locked in their gains. Let's go over the final profit results. Here's what we did: Bought back (bought-to-close) all of the ORCL December 21, 2018 $33 put options for an official buy price of $.05 per contract as a closing transaction (bought-to-close). Here are the profit details: We originally established (sold-to-open) this put option on June 26, 2018 for a sale price of $.25 per contract, and now we took gains by buying it back (bought-to-close) for $.05 per contract. With the fill at $.05, it locked in a gain of $.20 per contract ($20 for every contract traded) and a return on margin (ROM) of roughly 3% in four and a half months. If you like to annualize, that's roughly an 8% return. Some of you may have done better if you closed out the trade earlier. You might notice, that although our dollar gains are typically the same for each trade, our ROM can fluctuate quite a bit. The reason being - the strike price has everything to do with how much margin you will be required to hold aside, and thus, will affect your ROM. The higher the strike price, the higher the margin requirement. And vice versa. This is the main reason why I like to focus on lower-priced stocks - typically $50 and under. To understan