Thursday, 4 June 2015

Options Trade - BHP Billiton

In November 2014, I sold a put in BBL that expires in a couple weeks. Being in the money, I decided to roll my put down and out. The trades look like this

Bought to Close

May/28/2015 BTC 1 BBL Jun 19 '15 $50 Put @ 5.30 ($11.20 commission)
Nov/18/2014 Sold 1 BBL Jun 19 '15 $50 Put @ 3.00 ($11.20 commission + $0.01 SEC fee)
Profit: -$252.41

Sold Put

Jun/04/2015 Sold 1 BBL Dec 18 '15 $40 Put @ 3.90 ($11.20 commission + $0.01 SEC fee)
Days Held (sell date to expiry): 198
Net Premium: $378.79
Annualized Return = ($378.79 / ($4,000 - $378.79)) * 365/198 = 19.3%

The most likely outcomes of this trade are:

1. Shares are trading above $40.00 at expiration. I will get to keep $378.79 in net premiums.

2. BBL is trading below $40.00 at or before expiration and shares are assigned. I will receive 100 shares of BBL at a net cost of $36.21/share.


  1. ADY,

    That looks like a good trade. Between that and your NOV put, you have some pretty solid premium you should be able to earn. A month or so back I actually sold a BBL Sept 15 $55 covered call that should be money in the bank.


    1. We will know in Dec. I'm hoping to make up for my loss on the previous put. It's hard to imagine BBL @ $36, but with the market playing manic depressive, who knows. That would give it a dividend yield of 6.9%! And I can live with that.

      At this rate, I think you'll be pocketing your call premium. I've got a put expiring in 14 days and it looks like it will expire worthless. I'll be making about $280 CAD, which is good for toilet paper in the US, but still...