Net Option Proceeds This Week: $368.66

Last week, I completed eight option transactions and collected $3,505.94 in net option proceeds.

This week?

Just two transactions, both on Friday, generating $368.66 after fees.

Quite a difference.

But I'm perfectly comfortable with that.

The market simply didn't present many opportunities that I considered attractive. I spent the first four trading days watching my positions, evaluating potential adjustments, and deciding that the best course of action was to wait.

I could have sold additional options. But the strikes and premiums available weren't particularly appealing, especially with some of my underlying stocks having declined considerably.

And I wasn't interested in making trades simply to generate income for the week.

I have a strategy, but I don't have a quota.

That's what this week's Journal is about.

These figures represent actual option credits after transaction fees. They do not include unrealized changes in the value of my stock positions.

I also acquired 100 shares of Citigroup through assignment at $129 per share, representing a $12,900 stock purchase rather than income.

My Citigroup October 16 $129 cash-secured put resulted in assignment.

That meant purchasing 100 shares at $129, for a total of $12,900.

I was comfortable accepting assignment at that price.

After acquiring the shares, I sold an October 23 $129 covered call for $0.58 per share.

After fees, that generated $57.34 in additional option proceeds.

If those shares are called away at $129, I'll recover my stock purchase amount and retain the premiums collected from both the covered call and the earlier cash-secured puts, subject to applicable fees and accounting adjustments.

If the shares aren't called away, I'll continue owning them and evaluate the next opportunity.

This is one of the things I appreciate about combining cash-secured puts and covered calls.

I'm comfortable accepting assignment on stocks I want to own at the strike price. Once assigned, I can evaluate whether selling a covered call makes sense.

Of course, collecting premiums doesn't eliminate the risk of the stock declining.

But the process gives me flexibility in managing the position.

SPCX was my other transaction this week.

I had an October 16 $152.50 covered call approaching expiration.

On Friday, I found an opportunity to roll it to October 21 while maintaining the same $152.50 strike.

The roll generated a $3.12 credit per share, or $311.32 after fees.

That's an attractive amount of additional premium for extending the position five calendar days without lowering my potential stock selling price.

I'm comfortable having my shares called away at $152.50.

But when an opportunity presents itself to collect additional premium while maintaining a strike I'm comfortable with, I'm willing to consider it.

This particular roll made sense to me.

So I took it.

Two positions I've been watching closely are Micron Technology and Intel.

Both stocks have declined considerably from levels where I previously established positions.

That creates a challenge when selling covered calls.

I could move to lower strikes and collect additional premiums. But doing so could leave me obligated to sell shares at prices I don't particularly want to accept.

With INTC, for example, I own 100 shares purchased at $124.53.

I'm not particularly interested in selling a covered call at a substantially lower strike just because the premium looks attractive.

The same general thinking applies to MU.

I'm willing to accept assignment when the economics make sense, but I don't want to compromise my preferred selling price simply to generate another weekly credit.

So I've been waiting for some recovery in the underlying stocks that might improve the premiums available at strikes I'm comfortable with.

Will that recovery happen?

I don't know.

The stocks could continue declining, and waiting doesn't eliminate that downside risk.

But I would rather accept that uncertainty than enter an option position whose potential outcome I already find unattractive.

I don't need to sell an option every week just because I own the shares.

Another reason for the relatively quiet week is that several of my outstanding options have expiration dates further into the future.

I don't automatically roll a position simply because the market moves.

Sometimes the best approach is to let an existing position develop and allow time to work.

That doesn't mean I'm ignoring the positions.

I'm watching them, evaluating the economics, and remaining prepared to act if something worthwhile presents itself.

But watching a position and trading a position are two different things.

And this week, watching was frequently the better choice.

Last week's $3,505.94 was a particularly productive week for option cash flows.

This week's $368.66 was considerably smaller.

That's the nature of the strategy.

Premium opportunities vary, and I'm not willing to force trades simply to maintain a particular income level.

When a stock declines, selling calls closer to its current price can generate more immediate premium.

But it can also increase the risk of having shares called away below my preferred selling price.

I have to consider the entire outcome, not just the premium.

I spent most of this week evaluating positions without placing trades.

That wasn't inactivity caused by a lack of attention.

It was a deliberate decision based on the opportunities available.

Last week, eight transactions made sense to me.

This week, only two did.

I don't consider that a problem.

My goal isn't to maximize the number of trades.

It's to generate income when the economics justify the risks I'm accepting.

I'll continue watching my existing positions, particularly MU and INTC, for opportunities to collect premiums at strikes I'm comfortable with.

I'll also evaluate my other outstanding options as their expiration dates approach.

I may have several opportunities next week.

I may have very few.

I don't know, and I'm not going to pretend otherwise.

What I do know is that I'll continue applying the same process.

If an opportunity makes sense, I'll consider it.

If it doesn't, I'll wait.

This week's net option proceeds were $368.66 after fees.

Not an especially large number compared with some recent weeks.

But I'm satisfied with the decisions I made.

I accepted assignment on Citigroup at a price I was comfortable paying.

I sold a covered call against those shares.

I rolled SPCX when the premium became attractive.

And I left other positions alone rather than compromise my preferred strikes.

For me, that's a successful week of following my process, regardless of the amount collected.

Some weeks the market pays me to be active. Other weeks it pays me to be patient.

This was a week that required patience.

And I'm comfortable with that.

Until next week,

Options Income Journal

Disclaimer: Options Income Journal documents my actual trading activity, including trades, fills, decisions, and results. It is provided for informational and educational purposes only and does not constitute investment advice, personalized recommendations, or trading signals. Options involve risk, including the potential for substantial losses. Net option proceeds are cash flows and should not be interpreted as total portfolio profits. Past results do not guarantee future performance.