NEW UCPTD Trade Alert - TQQQ - CSP Buy Back

All rights reserved - Core Position Trading, LLC - 2020
	NEW TRADE ALERT
Closed a Cash Secured Put position prior to Expiration (profit)
DISCLAIMER: This trade is based on this date. I'm not suggesting a move up or down. I'm showing my trade that I have already done. I'm not recommending this stock as a purchase/trade. Think of it like this, I'm 'Showing you the World thru my Eyes'.
Closed a Cash Secured Put position prior to expiration
TQQQ
TIME AND DATE STAMP | .		June 10, 2020
My brief explanation why I ended this trade early
2 Main reasons … 1) When I said the markets were going to go higher … I did not think the 'higher' was going to be ALL TIME HIGHS … and with the NASDAQ back above pre-virus prices … ALL the FAANG stocks are on such a tear … Apple, Microsoft, Adobe, Nvida … the list goes on and on are ALL at ALL TIME HIGHS … I mean, this is ridiculous … the DOW and S&P500 still have room to run higher … I'm just shaking my head in amazement. Now, I'm NOT selling anything in my Buy/Hold portfolio … but my feeling with the TQQQ $96 CSP is this … IF I feel a pullback is coming … and it might only be with NASDAQ stocks because of the run … the TQQQ's will fall UNDER my $96 strike and with such little time on the option … it will start to trade at REAL MONEY … which could easily fall -10% in a blink (TQQQ being leveraged) … so that would put me in a spot. So, I would rather TAKE the 8.75% OFF the board for this trade (28% annual for this trade) which this trade fits for the ~30% annual I wanted and can have. BTW, that's the 2nd reason … I get 8.75% or 28% annualized with little to no risk NOW vs if the NASDAQ pulls back … finding myself battling … it's pretty easy 1 in the hand (Krum) vs 2 in the bush ...
The Headline Krum! (ACTUAL)
TRADE KRUM!	DAYS	Cash on Cash %	Annualized
$838.96	107	8.75%	29.85%
Max Profit Projections for this trade (EXPECTATION)
COMPANY	SYMBOL	SHARES	PRICE	TOTAL COST
TQQQ	TQQQ	100	$96.00	$23,295.00
EXPIRATION DATE	DAYS	STRIKE	OPTION	CoC % GAIN
Jun-19	107	$96.00	$12.90
DIVIDEND	DIVIDEND GAIN	OPTION GAIN	STOCK GAIN	TOTAL KRUM
$0.00	$0.00	$1,290.00	$0.00	$1,290.00
All calculations above are based on collecting [ Stock move + CCW + DIV if offered]
Always look at a companies chart ... it tells a story and that story could be UP or DOWN
How I could 'Manage' this trade should the stock rise or fall prior to expiration
I could manage this Cash Secured Put - #1 - The stock moves HIGHER then my strike price and at or before expiration I can either let the option expire worthless as the stock will not be assigned to me considering it is now trading HIGHER then my strike. I can buy back the option cheaper and release the obligation, collecting the difference between what I received and what I paid to release the obligation.
I could manage this Cash Secured Put - #2 - The stock dips below my strike price and I'm assigned the shares OR I can buy back the option prior to expiration, most likely paying more for the option then I was paid, losing money but not being assigned the shares.
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 - No - at the time of this posting I did not own the shares of this equity. and it probably means I've done a Cash Secured Put ... for which if this trade goes against me I *will* own these shares ... I risk my own money on this trade and am accountable for the trade results.
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