10/23/2022 Plan:
This week we return to Home Depot (Ticker: HD) and also Prudential (Ticker: PRU)
10/23/2022 Plan (continued):
- HD – Sell Nov 11 250/245 put spreads for 0.50
- PRU – Sell Nov 18 87.5 puts for 0.90 OR
- PRU – Sell Nov 18 90/85 put spreads for 0.62
- Prices are as of market close 10/21/2022, 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
10/23/2022 Commentary:
We just had a winner with Home Depot expiring on Friday at the 270 level. This trade looks to duplicate that with a strikes 20 points lower. Home Depot’s 52 week low is above 264, so this trade has some good support. Anything can happen though, so keep your position sizes in check.
Adding the PRU trade as this name has moved up strong from its recent low around 85. I personally am planning to sell puts at the 87.5 level for 0.90. With a strong and growing dividend, I’m happy to add shares at that lower level. That will take $8750 to do so. The put spread has a lower probability of expiring worthless given the higher short strike, but wanted to offer it in case one isn’t as interested in PRU longer term.
Feel free to Reach out with questions on this or anything else!
10/24/2022 Entry:
Sold the HD Nov 11 255/250 put spreads for 0.51.
Sold the PRU 87.5 put for 0.75
10/30/2022 Update:
Last week was a great week to sell premium, our HD put spreads are now worth 0.04 and can be closed quick for a great 1 week gain. If you leave them on, don’t forget about them in case the market pulls back after the big run up.
The PRU puts are worth 0.25 for a $50 gain in just a week. No harm in closing. I’m going to likely leave it through expiration as I’d still be happy taking shares at that level. If it gets down to just a few cents, I would then close.
11/5/2022 Update:
The HD put spreads are worth about 0.07 and expire this week if you didn’t close them last week. I left them on. With HD above 284, these are relatively safe, but don’t forget to close/manage this week given expiration.
Two weeks left on the PRU puts and they are worth about 0.12. If I can close cheaply, great, otherwise I’ll ride this one out. Very unlikely to be assigned now that earnings are behind us.
11/12/2022 Partial Close:
The HD put spreads expired worthless, adding $51 of profit to one’s account per put spread sold. Home Depot has earnings this week, so I would hold off on another trade in this name until After earnings.
The PRU put is effectively worthless. You can close cheaply, let it (likely) expire worthless or even buy a higher put cheaply to turn it into cheap downside protection for the week. It does expire this Friday. I’m personally leaving it alone, with the expectation it will expire worthless.
11/20/2022 Close:
With PRU trading above $107 on Friday, the 87.5 puts expired worthless – quite far out of the money. If you sold put spreads, those also did fine with the 90 strike not really in any danger. For each put sold, $75 in profit was made. I’ve been trading in and out of PRU for many years – it offers a decent dividend if you are assigned while waiting to sell calls to get out of the position.
