Good Friday Beckons

I wrote here last month about investors' thrill on seeing covered calls and naked puts expire worthless. Nothing feels better than getting something for nothing. It also feels good to know you made good decisions when those options were sold initially. I've put together this month's list of options in my personal accounts, which are almost certainly going to disappear at 4 p.m. this Friday. Eight of those transactions were puts, 31 were covered calls, which are also likely to go unexercised. A Real Piece of American Woodmark The AMWD put sale of this week's $70 put appeared aggressive when I sold it. It doesn't look that way now. As of Wednesday, American Woodmark was selling for about $99. Net gain if this expires on Jan. 15 would equal 100% of the sales price or $1,260. Some of the trades shown are duplicates, which might have been done at identical or different price points, depending on the dates executed. They were traded across six separate accounts. Each was a discrete transaction, though. Many other covered calls have already expired on these holdings. Others remain in force out to future months at strike prices ranging up to $35. Making a Good CAL I sold Caleres Jan. 15 expiration day covered calls, at various strike prices across all six of these accounts. The lowest strike sold was $20 and the highest was $30. Unless CAL makes a huge move over the next couple of days all of them will expire worthless. Covid held the stock in check until recently but, just since October CAL has shot up from south of $7 to north of $16. As of Wednesday, it was bidding $16.73. Total premiums collected on all six accounts was a tidy $9,654. Bullish on CATO Regular readers know I've been bullish on CATO for quite a while. Last spring I sold short 14 contracts of CATO's Jan. 15, 2021 $7.50 puts at $1.55 per share, collecting $2,170. As of Wednesday, CATO was holding above $10. If nothing bad happens by Friday that entire mount will be pure profit. Designing a DBI Trade Designer Brands is another of my larger positions. Four of my accounts have calls expiring this week, if the shares don't rally hugely by Friday afternoon. Total premium dollars received from the expiring options totaled $3,421. Essent's Ascent I have one account with three contracts of Essent Group's Jan. 15, 2021 $25 puts coming toward expiration day this week. I wish I had more. I pocketed $810 for those when sold. It's too bad I can't force those put holders to give me the shares. ESNT was trending between $48 - $49 on Wednesday. Lassoing Profits on Harsco Four contracts of Harsco's Jan. 15, 2021 $10 puts were sold for $2 per share many months ago. The stock was north of $18 with two days to go. Assuming no crash by Friday, I'll book an $800 gain when these disappear. Shopping for Rewards at Kimco Outdoor mall operator Kimco Realty has moved up nicely since I bought it at $11.09. I scalped a few dollars for selling some $17.50 calls, which expire this week. As of Wednesday, KIM was trading for $15.73. Barring a large rise before Friday I'll keep my shares plus the $75 premium received. Taking the MIK I've spoken positively about Michael's on numerous occasions, starting when it fetched about $2 per share. As of Wednesday, it was hovering near $16. I recently took in 10 bucks on one contract of its Jan. 15, 2021 $20 call. It appeared pretty certain MIK would not be that high by this week. Last spring, when MIK was still inordinately cheap, I shorted 30 contracts of its Jan. 15, 2021 $2.50 puts at 55.6 cents a share. I also sold 15 contracts of this week's $5 puts at $1.21 per share, Total put premium collected on those 45 total contracts was $3,485. Total expiration gain on MIK = $3,495 including the $10 from the lone covered call. This Is the PLCE to Be Children's Place dropped dramatically from its pre-Covid levels. Even so, many people saw huge upside potential and were willing to buy calls on it from me at prices ranging from $65 to $110 for this week's expiration. As of Wednesday, PLCE was selling for $54.35. Unless it rises dramatically by Friday, all three sets of calls will expire worthless. Total gains on contracts disappearing this week will be $1,870. TILE's Time to Shine Interface has been running hot lately. It's almost doubled from where it sat in mid-October. As of Wednesday, it fetched $11.60. Nobody is likely to put me the shares at $7.50 this week. Net gain if this expires, as expected, $1,200. A Lesson From Tutor Perini Tutor Perini provided good chances to sell both covered calls and naked puts for this week's expiration day. I collected $1,656 for selling six contracts of its $12.50 puts. Those are almost certain to disappear on Friday, as TPC now commands $15.69 per share. My average prices are well below what is shown on the screen shots above as 600 shares showing the $15 cost were previously exercised puts at that strike price. I received $3.35 per share for selling those puts giving me an adjusted cost basis of $11.65, not $15. TradeStation's system did not adjust for that exercise. I'll need to do that manually, now I've noticed the error. Unless TPC moves up sharply by 4 p.m. this Friday, the 26 contracts of Jan. 15, 2021 $17.50 calls will expire worthless. Net premiums collected for those equaled $3,560. I'm not rooting against a large uptick by then. If TPC manages to go in the money by then my TPC position will be worth much more than it is today. Once you've sold a call option, the best possible profit always comes if the underlying shares close at the strike price or higher. The spreadsheet below details the expected gains from all the transactions mentioned. You can make money selling calls. You can make money selling puts. You can make money doing both. Many of my readers may be much richer than I am. In my world picking up over $31,000 for just a month's option expirations pays a lot of bills. The returns are often even better. The money was paid to me months ago and invested in shares I liked, which have gone up dramatically since. I was thus able to invest $31,586 of other people's money and profit from that, too. Starting next week I'll be eligible to sell new covered calls on all the shares, which saw calls expire this week. That starts the process all over again. Take in money for options sold. Then wait for time to pass and either sell shares at the newly selected strike prices, or capture premiums on expired options once again. Call it the shampoo technique of investing... lather rinse, repeat.

Good Friday Beckons

Lets look at some probable -- and profitable -- expirations on options expected to come in an the week's end.

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