Weekly Option Trades (Jan 29-Feb 2, 2024)

Disclaimer:

The content of this article is for educational and informational purposes only. It does not constitute financial advice or a recommendation to engage in any specific trading strategies. Options trading involves significant risks, including the potential loss of principal, and may not be suitable for all investors. Readers should carefully consider their own investment objectives, risk tolerance, and financial situation before engaging in options trading. Readers should conduct their own research and consult with a qualified financial advisor before making any investment decisions. The author does not guarantee the accuracy, completeness, or timeliness of the information presented and shall not be held liable for any losses or damages arising from its use. All trading decisions are made at the reader's own risk, and past performance is not indicative of future results. Any references to specific securities or trading strategies are for illustrative purposes only and should not be interpreted as endorsements. By reading this article, readers acknowledge and agree to the inherent risks involved in options trading.

I executed the following option trades during the week of Jan 29 - Feb 2, 2024:

Trade 1

I bought to close 10 $MARA cash-secured puts to lock in profits, 18 days prior to expiration, and paid back $210 (plus fees and commissions).

BTC 10 $MARA 02/16/2024 $14 cash-secured puts (-$0.21/share)

Motivation:

• Reminder: I opened this trade on Jan 24, 2024 and received a premium of $0.71 per share or $710 for the 10 contracts (minus fees and commissions).
• I closed the trade today to lock in 70% of the max profits after 5 days, rather than waiting another 18 days for the remaining 30% profits.
• I made a profit of $500 (minus fees and commissions) in 5 days with a collateral of $14,000 which is a return on investment of 3.6% in 5 days.
• I'll now look for the next opportunity for the freed-up cash.

Trade 2

I bought to close 10 $TNA cash-secured puts to lock in profits, 18 days prior to expiration, and paid back $270 (plus fees and commissions).

BTC 10 $TNA 02/16/2024 $30 cash-secured puts (-$0.27/share)

Motivation:

• Reminder: I opened this trade on Jan 10, 2024 and received a premium of $0.77 per share or $770 for the 10 contracts (minus fees and commissions).
• Today I closed this trade to lock in 65% of the max profits.
• I made a profit of $500 (minus fees and commissions) in 19 days with a collateral of $30,000 which is a return on investment of 1.66% in 19 days or a 2.6% monthly return (31.6% annualized).
• I'll now look for the next opportunity for the freed-up cash.

Trade 3

I sold to open a new $TSLA cash-secured put for $2.26 per share and received $226 (minus fees and commissions).

STO 1 $TSLA 02/16/2024 $180 cash-secured put ($2.26/share)

Motivation:

• Fulfilled my preferred criteria with a delta of <= 0.2 and a monthly return of around 2%+Delta (when I executed the trade): 0.20 (an approximate 80% chance of expiring worthless)If the put expires worthless, it would be a 1.25% return on investment in 17 days or a 2.2% monthly return; 26.6% annualizedNote that $TSLA is dropping after hours and the $180 strike price delta is up to around 0.3 and the premium around $2.57 at time of writing
• Since Dec 27, 2023, $TSLA fell about 32% from $260 to a low of $180 on Jan 25, 2024 (when it gapped down after the earnings release). Over the last 3 trading days, $TSLA started to recover from the $180 low on Jan 25, 2024. My strike price coincides with this low (see top picture).
• The RSI (see bottom picture, bottom chart) is below 20 which typically indicates heavily oversold levels. In the past, when $TSLA was at these RSI levels, it rebounded strongly. Of course, this doesn't mean it will do so this time. The stock also trades near the lower Bollinger Band (see bottom picture, top chart).
• Note that $TSLA is a volatile stock and can move fast. With the right catalyst this option can quickly move ITM. Like with all trades, only consider a $TSLA CSP if you don't mind owning $TSLA long term at your selected strike price.

Bollinger Bands and RSI:

Trade 4

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