This past Tuesday wasn’t a great day for some of the stocks that I have sold puts on. Three of the stocks were down by more than 8% early in the trading session. Sharp price declines like that will test your ability to stay cool in the face of potential investment losses. As it turned out, the stock prices did move up throughout the day and the four put trades of mine that closed on February 26 were all profitable.
Very few put options passed my screen this past week. Time will tell if this is a turning point or just a lull. As I have stated before, at times it has felt too easy in the past several months to generate profits with naked puts so I wouldn’t be surprised if the equity markets become more challenging.
In the past two weeks, I have written a number of covered call trades on U.S. stocks. My plan is to hone my skills on covered calls and trade them as well as naked puts.
All the best in trading and in life.