Example – how to collect option premiums

Instrument: XPO Logistics, Inc.

Reason: Why this one? When you look at the chart at the day i sold the Put Option it looks to me like XPO is forming a bottom. The second reason was that XPO was about to join the S&P Midcap 400 Index. It´s often the case that when a company joins an index, it will rise the next weeks/months.

1st Option:
Sold 1 XPO Apr18´19 45 Put. That means i sold a Put Option to someone which ends on 18th April 2019 at a 45$ Strike. (Mr. Someone has the right to sell 100 XPO stocks for 45$ on 18th April to me. I have the obligation to buy it from him. This makes only sense if the price on 18th April is below 45$).
More than 10 % lower than the price of the stock on this day.
Entered the trade on 11th March 2019 for 1$. Bought the Option back on 1st April 2019 for 0.1$.

2nd Option:
Sold 1 XPO May17´19 47.5 Put for 1.05$. Entered the trade on 1st April 2019. Bought it back on 2nd May 2019 for 0.1$.

3rd Option:
Sold 1 XPO Jun21´19 55 Put for 1$. Entered the trade on 2nd May 2019. Rolled the option out. So i bought it back with a loss and sold another Put with a lower strike and a further-dated expiration.

4th Option:
Sold 1 XPO Jul19´19 52.5 Put for 3.6$. Entered the trade on 28th May 2019. Bought it back on 16th July for 5 cents.

5th Option:
Sold it not immediately after i bought the fourth option back because of earnings on 1st August. One day after earnings (2nd August 2019) i sold 1 XPO Sep20´19 60 Put for 1.1$. Bought it back on 5th September for 22 cents.

6th Option:
Sold 1 XPO Oct18´19 62.5 Put for 1.1$. Bought it back on 10th October for 22 cents.

7th Option:
Sold 1 XPO Nov15´19 62.5 Put for 1.45$. Bought it back only 15 days later for 30 cents.

8th Option:
Earnings on monday (28th October) after market close. Probably i´ll sell another put on Tuesday. Sold it on 1st November for 1.15$. Bought it back for 22 cent.

9th Option:
Sold 1 XPO Dec20´19 77.5 Put for 0.7$. Bought it back for 0.14$.

10th Option:
Sold 1 XPO Jan17´20 72.5 Put for 0.8$. Bought it back for 0.15$.

11th Option:
Sold 1 XPO Feb21´20 70 Put for 1.05$. Bought it back for 0.2$ only 7 days later.

12th Option:
Waiting for 2 reasons: 1: Earnings in a few days. 2: Danger of slowdown because of the Coronavirus.
Sold 1 XPO Mar20´85 Put for 1.1$. Bought it back for 0.22$ 8 days later.

13th Option:
Sold 1 XPO Mar20´20 90 Put for 0.75. This time the option got assigned and i´ve now 100 stocks in my portfolio. The premium i kept, of course.

14th Option:
Now that i have the stocks in my portfolio, i can sell calls against it.
Sold 1 XPO Jun19´20 90 Call for 1.4. Bought it back for 0.3.

15th Option:
Sold 1 XPO Aug21´20 90 Call for 2.1. Bought it back for 0.2.

16th Option:
Sold 1 XPO Sep18´20 92.5 Call for 2.35. Bought it back for 0.3.

17th Option:
Sold 1 XPO Oct16´20 95 Call for 1.95. Bought it back for 0.3.

18th Option:
Sold 1 XPO Oct16´20 90 Call for 1. Rolled the option out. That means i bought it back for 6.75$

19th Option:
Sold 1 XPO Nov20´20 95 Call for 7.1.

XPO Logistics on the day i sold the first option:

RESULTS:

Collected 1st Option Premium: 88.61$

Collected 2nd Option Premium: 93.56$

Collected 3rd Option Premium: – 286.39$

Collected 4th Option Premium: 353.55$

Collected 5th Option Premium: 86.61$

Collected 6th Option Premium: 86.61$

Collected 7th Option Premium: 114.36$

Collected 8th Option Premium: 91.66$

Collected 9th Option Premium: 55.36$

Collected 10th Option Premium: 63.56$

Collected 11th Option Premium: 84.31$

Collected 12th Option Premium: 87.36$

Collected 13th Option Premium: 73.90$

Collected 14th Option Premium: 109.52$

Collected 15th Option Premium: 187.81$

Collected 16th Option Premium: 204.52$

Collected 17th Option Premium: 162.83$

Collected 18th Option Premium: -576.32$

Collected 19th Option Premium: ?

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