9/11/2021 Plan:
This week we look at Microsoft (Ticker: MSFT)
9/11/2021 Plan (continued):
- MSFT – Sell the Oct 8th 280/275 put spread for 0.55
- C – Sell the Oct 8 65 put spread for 0.71
- Prices are as of market close 9/10/2021, actual fill and strikes may differ depending on Monday’s open, post will be updated accordingly.
- All trades are for educational purposes and do not constitute advice
9/11/2021 Commentary:
I think I bought my first shares of Microsoft in 2004 when they announced a special dividend of $3. From memory (i.e. someone will check and correct me), it was in the $20-$30 range. It is up about 10x since, but unfortunately I didn’t buy that much. It languished for a long time, really until the current CEO, Satya Nadella, took over in 2014. It was worth less than $40 then. Nice job Satya. With MSFT down below the $300 level and the market selling off last week, this week’s trade assumes MSFT finds its footing and doesn’t go below 280. You can see from the chart that the implied vol is quite a bit more than the historical vol as well.
If one wants to *own* Citigroup, I like the 65 level for 0.71 expiring Oct 8th. You should have the ~$6500 in your account and be willing to own the shares to take this trade.
Feel free to Reach out with questions on this or anything else!
9/13/2021 Entry:
Sold MSFT Oct 8 280/275 put spreads for 0.53. Should fill a bit better. C put sale not available. Will monitor.
9/19/2021 Update:
The MSFT put spreads are worth 0.33 for a nice profit of 0.20 per spread after only one week. I plan to leave them on to go for more profit.
9/27/2021 Update:
The MSFT put spreads are currently worth 0.29, for a profit of 0.24/spreads. We have two more weeks on this trade and I don’t intend to change anything yet. MSFT did sell off some today, so if that continues, we may adjust later in the week.
10/2/2021 Update:
A wild week last week and our MSFT put spreads are now essentially break even. This is expiration week, so keep an eye on them. With MSFT near 290 and our short strike at 280, I’m intending to leave it alone and try to collect all the premium (or pay a tiny bit to close). MSFT can certainly move this much, so be prepared to cut losses or roll mid-week if the market turns down again.
10/10/2021 Close:
With Microsoft (Ticker: MSFT) finishing the week above 294, our put spreads safely expired worthless, adding $53 to our accounts per put spread sold. I still like MSFT moving forward and will continue to trade in it.
