- 3 different strategies compared over the course of the year.
Friday, March 19 was the second expiration in our strategy comparison of long stock versus short put (held to expiration) versus short put (managed at 50% of max profit). To recap, I learned from the guys at Tastytrade that unless you're 100% sure you always want 100% long exposure to a stock, it's better to enter or to stay exposed via short put.
This month, ATT was up $1.37 from Feb 1 to March expiration. The ATM put held to expiration earned 85 cents. And by managing to 50%, the trader earned 43 cents in 15 days reducing time exposed to the market by 30 days. Up to the trader to decide which kind of exposure he wants... no clear winner here, but no losers either!
Exxon stock had another great month... a profit of 11.96 From Feb 1 to Mar 19. The ATM put profited 2.25 held to expiration, and the ATM put managed at 50% of profit earned 1.13 in 2 days! I'll take that any time... $113 on an investment of $4250 in 2 days. A shame that can't be done twice a week.
Next update will be April 1 when we enter our new positions.
Analyst's Disclosure: I am/we are long T, XOM.
I trade both stocks and their options frequently.
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