I rolled UVXY today.
music selection: “Tales Of Brave Ulysses” — Cream
weigh-in: 204.2 (0.4)
I’ll get to UVXY shortly but first up is SIRI. My old position expired in the money over the weekend and shares were called away. I wrote a new put to stay in the trade. I sold SIRI171110P00005500 for 19 cents a share. The trade will be in force for 40 days and yields 31.52% annualized while enjoying 3.63% downside protection against a decline in share price. Very tasty.
I had a good till canceled sell order open on my UVXY puts at 12.55 which triggered this morning. It is important to use a limit order and not pay the bid/ask spread. But I don’t think I’ll use a good till canceled order again. Contracts were going for 12.74 shortly after my shares cleared at open so it looks like I left some money on the table in exchange for some minor convenience.
The contracts were originally purchased at 11.57 on 12SEP2017. Selling today at 12.55 resulted in the trade being in force for 20 days. The annualized yield is 154.58%. Very nice! That soothes my butthurt over leaving some money on the table.
I’m going to do some A/B testing to see if it makes sense to go into the money on this trade instead of always going out of the money. Somehow, I have never tried this. I bought this morning, UVXY190118P00015000 for 8.55 a share. I also bought half as many contracts of UVXY190118P00025000 for 16.80 a share. On the first, the time value will increase as the underlying decays. On the second, the opposite will happen but that will be offset by gaining intrinsic value as this contract is already in the money. The second contract also starts off with a penalty of requiring more capital outlay to enter. I think from some paper trading assuming the middle of the bid/ask spread that the returns will actually be very similar. If I am right, I will switch to going in the money as this is a move that also reduces risk.
Devour your prey raptors!