The collapse of YUM Stock left a lot of my positions in the money. Yet overall the collapse also provided substantial profits. On July 31 I had bought stock and sold naked puts at the $67.50 put strike. On Friday I did a lot of trading in YUM Stock. There were numerous roll-outs done and profits are increasing rapidly as the stock tries to recover which is driving up the put premiums on far out of the money puts but at the same making my puts that expired on August 16, trading for their actual value. The roll-outs were all highly profitable.

YUM Stock Collapses

Yum stock has experienced two collapses in the space of just a couple of weeks. The stock fell following earnings eventually trying to hold support at $75. Following a little over a week of holding the $75 level, worries over Chinese food quality (again) plunged YUM Stock  further as YUM warned that their earnings will be affected by the latest Chinese problems. The stock promptly broke the $75 support level and YUM Stock quickly fell to below $69 before recovering back to the $70 support level.

YUM Stock has experiences two collapses in less than a month

YUM Stock has experiences two collapses in less than a month

YUM Stock – Investor Worries

Often when stocks plunge, investors holding in the money naked puts worry they will be assigned. It is rare to be assigned unless the puts are incredibly deep or dividends are about to be paid. Often investors will pick up the dividend and then “put” the stock to the put holder as they do not want to hold the puts for longer. Aside from these two reasons I have rarely been assigned on naked puts that are in the money. This then means rolling puts forward to reduce still further the chance of assignment and keep bringing in more premiums.

Instead of worrying about assignment, the better choice is to study the charts and determine new strike points to roll out and down to to avoid assignment but at the same time continue to generate additional income. On Friday I rolled to a variety of strikes and am now holding 20 naked puts that stretched out over a period of months and end in Jan 2015. The results have been impressive as my capital continues to churn out more income for my portfolio thanks to the higher volatility in YUM Stock.

Here are all the latest trades done on Friday August 15 in YUM Stock for August 16 options expiry.

YUM Stock Trades for 2014 Update for August 17 2014

FullyInformed USA Members can review all the latest trades in YUM Stock directly through this link or sign in to the full USA members site here. Non-members can join here.


Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. Trade at your own risk. Stocks, options and investing are risky and can result in considerable losses. None of the strategies, stocks or information discussed and presented are financial or trading advice or recommendations. Everything presented and discussed are the author’s own trade ideas and opinions which the author may or may not enter into. The author assumes no liability for topics, ideas, errors, omissions, content and external links and trades done or not done. The author may or may not enter the trades mentioned. Some positions in mentioned stocks may already be held or are being adjusted.

Review YUM Stock Prior Years:

Review Yum Stock 2014 Trades

Review Yum Stock 2013 Trades

Review Yum Stock 2012 Trades

Review Yum Stock 2011 Trades

Review Yum Stock 2010 Trades

Review Yum Stock 2009 Trades

Yum Stock Internal Links:

Yum Stock Articles

Yum Stock Members Strategy Articles

Yum Stock External Links:

Yum Stock Investor Relations

Yum Stock Earnings Releases and Announcements

Internal Stock and Option Trades Links

Portfolio Listing by Years

My Principal Stocks Index

Trade Ideas for Members

Trade Alerts for Members

Put Selling Strategies

Put Selling Strategies For Members

Covered Calls Strategies

Covered Calls Strategies For Members

Profit And Income Strategies Index

Stock and Option Strategies For Members

Stock And Option Trades Explained For Members

Ask A Question About A Trade You Are In

Sign My Guestbook

Visit My Shop

Join The Free Options Forum