What’s the trade?
Closing LVS Cash Secured Puts for Profit
11/5/21 – With LVS trading over 42 this morning, we closed out the 42$ strike put in LVS for a profit (Bought to Close), only $16 short of our profit target, after being down for many weeks. Rolling several times helped.
10/27/21 – With LVS trading around $40 and 23 days left in the trade, we’re rolling from November out to the December monthly options for around a $74 credit.
- Buy to Close the Nov 17th 42$ Put
- Sell to Open the Dec 17th 42$ Put
I was able to collect about 72$ in premium for this trade. From the beginning in October, our premium collected was $116 + $80 + $74 = $270. To break even on this one, we just need the December option to decrease in value by $65.
9/28/21 – Rolling, Rolling, Rolling – With LVS trading at $37 and 17 days left in this trade, I’ve rolled the 42 strike put out to November 19th for an $80 credit. This brings our total collected on this trade up to $196, which means our Break Even is now 40.04.
Buy to Close the 10/15 42 Put
Sell to Open the 11/19 42 Put
9/14/21 – With LVS trading around $37 the put we sold is in the money so we are down. We have 3 choices here 1) Do nothing, 2) Roll to next expiration for a credit 3) close for a loss. I’m OK with #1 right now, and I’d consider rolling around 21 Days to Expiration, which is in a couple more weeks. Eventually if the stock doesn’t recover before the 10/15 expiration or 21 DTE, I could be assigned, and would then start selling covered calls against it. This is know as “wheeling”.
9/7/21 – Sell a 42 strike Cash Secured Put in LVS for $116
- Sell the October 15 42 Put
- Premium: Try to collect at least $116.
- Rationale: This is an undefined risk trade with no downside protection, so you will have to purchase 100 shares of LVS for $4200 if it dips below 42 on or before 10/15. With that out of the way, LVS has a juicy IV Rank of 36%
- Probability of making 58$: 82%
- Assumption: Bullish
- Timeframe: ~2-4 weeks.