Monday, 22 June 2015

Short Put Option Expired Worthless - SNC Lavalin

On Friday June 19, a put option I sold in SNC Lavalin expired worthless, leaving me with $283.80 CAD in net premiums.

The trade can also be seen on my Options Page:

Jun/19/2015 Expired worthless
Nov/06/2014 Sold 1 SNC Jun 19 '15 $42 Put @ 2.95 ($11.20 commission)

Days Held (sell date to expiry): 224

Annualized Return = ($283.20 / ($4,200 - $283.20)) * 365/224 = 11.8%

So far this year, I'm doing ok with my options trades. I'm hoping to make up for some of the losses I'm experiencing with Ensco. That stock is really pissing me off and I've been considering the partial sale of my holdings to off-set taxes on my income from options.

5 comments:

  1. Congrats ADY,

    Have you ever written a post on your option methodology? As in, what strike price you look for, etc..

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    Replies
    1. To be honest, I don't follow a predefined methodology when selling put options. My main guideline is to sell puts on what I perceive to be fairly valued or undervalued stocks that I wouldn't mind being assigned. I mainly sell out of the money put options and generally aim for annualized returns greater than 10%.

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  2. Have you ever considered using Interactive Brokers instead of your current broker?
    Their option pricing is less than $1 (maybe $1.5 if you use intermediary agency) and their margin requirements are a lot better than any broker I ever heard about.

    Considering a $1.2 commission your annualized return would've been: 12.2%
    That's free 0.4% extra for the exact same trade

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    Replies
    1. Oh, and they are accepting clients from all over the world (mostly)!

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    2. Funny you mention this because I called my brokerage firm last week asking them to reduce the commission on my trades. They said that a reduction was possible if I would make over 100 transactions per quarter! So basically, if you're a day trader, they'll give you a better price. The person I spoke with even acknowledged that other firms were offering lower trading fees!

      My account is with InvestorLine and I'm quite happy with their services. When I have problems, they are quick to resolve them. I've had them credit me several fees and they've even given me some free transactions just for asking. And they've been rated number 1 in Canada for the last 5 years.

      The only pain I experienced with them was getting naked options added to my margin account. They don't offer cash covered put options.

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