NEW UCPTD Trade Alert - UDOW - Cash Secured Put

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NEW TRADE ALERT
Wednesday, May 6, 2020
Standard Cash Secured Put Strategy
				3x ETF
Opened a Cash Secured Put: UDOW - UDOW
TRADE KRUM! (see details below)		DAYS	Cash on Cash %	Annualized
$798.96		44	8.89%	73.74%
Brief Description of WHY I did this trade and my expectations for it
Looking at the DOW ... the markets seem more stable then not ... so with UDOW having a KC MID $51.41 ... almost trading at its current price ... I'm thinking a Cash Secured Put for a month or so would be a good play considering the KC BOTTOM is $43.83 ... my CSP Strike is $45 and was given +$4 ... so my thinking is ... if the markets were to sell off to the KC BOTTOM ($43.83) I would STILL be in the money with being given $4 for the option ... my true cost basis being not $45 rather instead $41 ... NOW, I will play this CSP to buy back the option CHEAPER and pocket the difference ... never being assigned the shares ... I think UDOW will stay ABOVE $45 and this option will expire worthless keeping this +$800 Krum for only $9,000 risked. +9% Cash on Cash return.
Trade Breakdown with the BUY BACK Calc
COMPANY	SYMBOL	SHARES	STOCK PRICE	STRIKE
UDOW	UDOW	200	$45.00	$45.00
PREMIUM RECV	BUY BACK PRICE	DIFFERENCE	CASH PROFIT	CoC% GAIN
$4.00	$0.00	$4.00	$800.00	8.89%
Always look at a companies chart ... it tells a story and that story could be UP or DOWN

Education Corner
Great Covered Call video posted at
Cash Secured Put - Description -The cash-secured put involves writing an at-the-money or out-of-the-money put option and simultaneously setting aside enough cash to buy the stock. The goal is to be assigned and acquire the stock below today's market price. Whether or not the put is assigned, all outcomes are presumably acceptable. The premium income will help the net results in any event. The investor is bullish on the underlying stock and hopes for a temporary downturn in its price. If the stock drops below the strike, the put may be assigned. That would allow the put writer to buy the stock at the strike price. The effective purchase would be even lower: strike price less the premium received. There are two principal risks. First, the stock might not only dip but plummet well below the strike price. The investor must be comfortable with the strike price as an acceptable long-term acquisition price, no matter how low the market goes. Source - https://www.optionseducation.org/strategies/all-strategies/cash-secured-put
Disclaimer - Yes - at the time of this posting I do have a position in this equity. By posting this I am by no means recommending this equity and am not front running for its preformance. I have risked my own money and am accountable for the trade results.
Image credits - stockcharts.com | barchart.com | foolcdn.com | yahoo.com | earningswhispers.com
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