Tuesday, 12 May 2015

Options Trade - National Oilwell Varco

On May 12, I sold a put in No Other Vendor. The trade:

Sold 1 NOV Put Jan 15 '16 $50 Put @ 5.30 ($11.20 commission + $0.01 SEC fee)

Days Held (sell date to expiry): 249

Net Premium: $518.79

Annualized Return = ($518.79 / ($5,000 - $518.79)) * 365/249 = 17.0%

The most likely outcomes of this trade are:

1. Shares are trading above $50.00 at expiration. I will get to keep $518.79 in net premiums.

2. NOV is trading below $50.00 at or before expiration and shares are assigned. I will receive 100 shares of NOV at a net cost of $44.81/share.

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