McDonalds Stock has been an outstanding performer for 4 years now and since January that has not changed. While not bringing in quite as big a profit as YUM Stock has done since January, McDonalds Stock nonetheless had padded my US Stock portfolio with an additional $6110.00 in income for a nice 9.4% return since January 2 2013. Part of this success though has been because I have been buying back naked puts early and redeploying the capital back into more naked puts within McDonalds Stock.
McDonalds Stock Chart Daily Since Jan 2 2013
The daily stock chart of MCD Stock below shows that the stock is up 10.62% from January 2 to March 28 2013. My gain of 9.4% looks reasonable when considering the stock itself is up 10.62%. It is this kind of steady rise in a stock that makes Put Selling easy. By staying at the money or slightly out of the money I have a lot of confidence I can earn the put premiums while at the same time if McDonalds Stock pulled back and I was assigned shares, I could easily have those shares exercised through selling in the money or at the money covered calls as long as the longer-term uptrend remains intact. This is the type of stock I love for Put Selling. Eventually this rise will end but for now this is ideal for put selling.
But to tie up capital for one or two months to secure naked puts means that additional rises in the stock cannot be sold against unless I want to commit additional capital into the trade on McDonalds Stock. Considering that McDonalds Stock at above $90 requires a lot of capital to secure these naked puts, it can be quite daunting to earn a great return but control the amount of capital being used.
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