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.

First 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$.

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

Third 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.

Fourth 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.

Fifth 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.

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

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

Eighth 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$.

XPO Logistics on the day i sold the first option:

  • Collected First Option Premium: 88.61$
  • Collected Second Option Premium: 93.56$
  • Collected Third Option Premium: – 286.39$
  • Collected Fourth Option Premium: 353.55$
  • Collected Fifth Option Premium: 86.61$
  • Collected Sixth Option Premium: 86.61$
  • Collected Seventh Option Premium: 114.36
  • Collected Eighth Option Premium:

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