ARKK – Sell a Naked Cash Secured Put ***HOT TRADES*** [CLOSED FOR 50$ PROFIT]

arkk
hottrades

6/11 – OPENED If you are bullish on ARKK or think it will stay where it is for the next few weeks, this is a simple, bullish trade. While the stock was trading at 116$, I sold the 7/16 $102 put collecting $133 in premium. At 15 delta with 34 days until expiration, I’m aiming to collect $66.50 (50% of the premium received) on or before 21 days to expiration, 6/26. I’ll be collecting around 5$ in theta decay each day. The risk is that between now and July, this ETF tanks, and you’ll have to either 1) buy 100 shares of ARKK for $10,200 or 2) close the trade for a loss. (Maybe you’ll just “wheel it” after taking ownership and sell calls against it, right?) This trade consumes about $1,000 in buying power on the tastytrade platform. This is our analysis, something we’re doing, but not a recommendation or investment advice. To learn more about ARKK, run by Cathie Wood check out our previous post on this ETF. 

6/14 – ARKK is up about 2$ today, so I rolled the 102 (12 delta) put up to 106 (17 delta), collecting an additional $45 dollars for a total of $176. Still in July expiration with 32 Days to Expiration.

6/15 – Today was tough. ARKK lost 3.24, making me second-guess if I did the right thing adjusting the put yesterday. I’m going to hold, but monitor carefully. There is 1 month until expiration so a lot could happen in the next few weeks. I’m comfortable with the risk here, and can always turn ARKK into a covered call if I’m assigned. Other options include rolling out in time for a credit. At the moment I’m going to sit tight and monitor.

6/17CLOSED Today ARKK is up 4.35 and I closed for 38% of the premium initially collected. For me that was a 50$ profit. Not quite the $66.50 I wanted, but still a nice profit in my book! 5% return in 6 days.

-Jerry

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