| All rights reserved - Core Position Trading, LLC-2021 | ||||
 | NEW CSP TRADE | |||
| Standard Cash Secured Put Trade | ||||
| NEW Cash Secured Put position was opened on | ||||
| TIME AND DATE STAMP | Thursday, March 4, 2021 | |||
Redfin Corp |  | |||
| 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'. | ||||
| My brief explanation for this trade and how it closed | ||||
| MINDSET WHEN OPENED - Below I explain why I did this trade | ||||
| CSP - Wanting to own another 100 shares of RDFN, I decided to use a CSP ... bit in the ITM here for the $7.30 premium ... offers good downside protection as again, I want another 100 shares for selling premium so consider this a NEW Wheel trade. | ||||
| WHEN TRADE CLOSES - I explain my thoughts on how this closed out. | ||||
| Trade is OPEN - I will add commentary when this trade closed | ||||
| This (43) day trade begins and ends for the dates below | ||||
| 43 | March 4, 2021 | April 16, 2021 | ||
| MAX PROFIT - Premium Income | ||||
| Because this is a Cash Secured Put I can only make money on the Premium I received for placing this trade. I do not own the stock so I do not make any stock appreciation or collect any company dividends should the company offer one. | ||||
| TRADE KRUM! | DAYS | Cash on Cash % | CONTRACTS | SHARES |
| $730.00 | 43 | 10.43% | 1 | 100 |
| Max Profit Projections for this trade (EXPECTATION) | ||||
| COMPANY | SYMBOL | SHARES | PRICE | TOTAL COST |
| Redfin Corp | RDFN | 100 | $70.00 | $7,000.00 |
| EXPIRATION DATE | DAYS | STRIKE | OPTION | CoC % GAIN |
| Apr-16 | 43 | $70.00 | $7.30 | 10.43% |
| DIVIDEND | DIVIDEND GAIN | OPTION GAIN | STOCK GAIN | TOTAL KRUM |
| No | $0.00 | $730.00 | N/A | $730.00 |
| Downside Protection should this trade Bad! | ||||
| CURRENT SHARE $ | PREMIUM | STRIKE | PRICE | WOULD FALL |
| $70.00 | $7.30 | $70.00 | $62.70 | -$7.30 |
| BREAKEVEN | ||||
| IF I mention this in a "What is John Watching" email (link) | ||||
| NOTE: LINK BELOW WORKS UNLESS I HAVE TO CHANGE THE BLOGGER DOMAIN ... IF THIS LINK IS DEAD - YOU CAN GO TO THE WEEKLY EMAILS BLOG SITE AND SEARCH THE COMPANY NAME | ||||
| How I could 'Manage' this trade? | ||||
| 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. | ||||
| Selling Premium Education Corner (definition and links) | ||||
| 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 ... I risk my own money on this trade and am accountable for the trade results | ||||
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| Image credits - stockcharts.com | barchart.com | foolcdn.com | yahoo.com | earningswhispers.com | ||||
| All of my CPT Abbreviations and Acronyms can be found below | ||||
| https://cptdashboard.blogspot.com/2021/02/CPT-lingo.html | ||||
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