IRA – Valero Energy FEB Back-Ratio – Profit $143
January 12th, 2010, 2:06 pm EST. Posted under Individual Retirement Account (IRA) by ThetaTrader.
Post Tags: , CLOSED, VLO
18.79 (+0.17)
03/04/2010 – ThetaOptions IRA Portfolio - Back-Ratio Closed – Profit $143
The IRA has closed our original Back/Ratio spread for profit….it turns out VLO never dropped deep into our spread for us to purchase the shares. However, this is a great example of using a Back/Ratio option spread in-order to collect Theta and still maintain a profitable trade on a stock that you wish to own.
Filled Order:
BOT +1 VLO 100 MAR 10 17 PUT @.05 debit
Position: We still have the JAN11 dividend play cooking
Profit Calc:
1/12 – Opened (3) 1/2 PUT Back/Ratios for $3 credit
2/12 – Sold (3) FEB PUTs for 0.55 credit
2/12 – Sold (1) MAR PUT for 0.53 credit
2/12 – Closed (5) FEB Short PUTs – 0.13 debit
2/16 – Closed (1) FEB Short PUT – 0.05 debit
3/04 – Closed (1) MAR Short PUT – 0.05 debit
Profit - $143
Risk/Reward: $3400/$143 or 4.2% in (8) weeks
February 16th, 2010 at 10:21 am
02/16/10 – Trade Adjustment
We bought back the FEB 17 Short PUT for 0.05 this morning. We now have (1) MAR 17 PUT at cost basis of 15.50. Which we really don’t mind owning VLO at 15.50