Put Options on ANF and CRM
ANF
Type: naked short put
Margin requirement: ~$450
(While this is technically a naked trade, I have the available funds if I were to be assigned.)
08/15/14 STO 1 ANF Sep26 2014 35 Put @ 0.67
Comm = 1.54
Credit: $0.67
Earnings for this stock is before market open on 8/28/2014. I will look to manage this trade for at least a 50% winner as volatility drops following earnings and/or stock rises in price to become even more OTM.
This trade could turn out a few ways:
| Max Profit | $67 – $1.54 = $65.46 | Max profit occurs if ANF is greater than 35 on expiration day, which is September 26. Max Profit = Net Premium Received – Commissions Paid |
| Max Loss | $3500 + $1.54 – $65.46 = $3436.08 | Max loss occurs if ANF goes bankrupt before expiration day, which is September 26. Max loss = stock drops to $0 |
| Breakeven Point | $0 | Breakeven point occurs at 34.33. Breakeven Point = Strike Price of Short Put – Net Premium Received |
| Possibly Assigned Shares | varies | At any point when the stock is trading for less than 35 I could be assigned 100 shares at $35.00/share. |
Update (8/26/2014):
After 11 days I was able to manage this trade for greater than a 50% winner. I probably could have waited a bit longer as volatility was likely to contract after earnings, which is coming up prior to the open on 8/28.
However, I’m being mechanical and frequently trading small amounts of money with high-ish probabilities. This means taking profits and then reallocating the freed up funds elsewhere. In the case of ANF, I was able to buy the put back for 0.21, locking in a profit of $42.93 (or 64.1%) after commissions.
08/26/14 BTC 1 ANF Sep26 2014 35 Put @ 0.21
Commission: $1.53
Profit/Loss: $42.93
CRM
Type: naked short put
Margin requirement: ~$450
(While this is technically a naked trade, I have the available funds if I were to be assigned.)
08/15/14 STO 1 CRM Sep26 2014 47 Put @ 0.50
Comm = 1.54
Credit: $0.50
Earnings for this stock is 8/21/2014. I will look to manage this trade for at least a 50% winner as volatility drops following earnings and/or stock rises in price to become even more OTM.
This trade could turn out a few ways:
| Max Profit | $50 – $1.54 = $48.46 | Max profit occurs if CRM is greater than 47 on expiration day, which is September 26. Max Profit = Net Premium Received – Commissions Paid |
| Max Loss | $4700+ $1.54 – $48.46 = $4653.08 | Max loss occurs if CRM goes bankrupt before expiration day, which is September 26. Max loss = stock drops to $0 |
| Breakeven Point | $0 | Breakeven point occurs at 46.50. Breakeven Point = Strike Price of Short Put – Net Premium Received |
| Possibly Assigned Shares | varies | At any point when the stock is trading for less than 47 I could be assigned 100 shares at $47.00/share. |
Update (8/22/2014):
After 7 days I was able to manage this trade for greater than a 50% winner.
I was able to buy the put back for 0.12, locking in a profit of $34.93 (or 69.9%) after commissions.
08/22/14 BTC 1 CRM Sep26 2014 47 Put @ 0.12
Commission: $1.53
Profit/Loss: $34.93
