Retiring Easy Portfolio 2022 trades

A new trade today out to Dec 16 expiry to add in a more profits for this portfolio. I plan to add in another trade next week for Dec 16 again or Dec 23 expiry. I don’t want to place too many trade beyond December at present as I am of the o pinion the rally will push into year-end but perhaps give back some of the gains in January.

The Latest Lows

The 12 month low was on Nov 3 when the stock hit $214.25.

The stock is down 31% from its 52 week high made Nov 22 2021 of $349.67.

New Trade Comments

I started a new trade today. As explained, this is a trade ahead of another trade planned for next week.

Protection

This trade has 15% protection and the stock will have to fall $36 from where I entered the trade to reach my put strike.

Trade Setup Comments

I wouldn’t chase the put premiums. I would place an offer and leave it there for the rest of the day or into the next trading day.

If you are concerned that the stock and markets will fall again, not entering this trade is a good idea.

Remember, I keep offers to buy to close early open the entire trade and adjust them as the stock moves.

If entering these or similar trades, scale positions to the size of your portfolio and/or to the level of comfort you prefer. A nervous investor would place a smaller trade while a more aggressive investor may choose to increase the size of trades taken. It comes down to personal choice and how much risk to capital being used. I am not a financial planner and have no financial accreditations. You always trade at your own risk. There are no guarantees in stock trading. Remember I always place an offer to buy to close early and leave it open throughout the trade, adjusting it as the trade progresses. As well, in a market sell-off, consider placing a stop-loss at a price point where you would want out of a trade.

Microsoft Stock (MSFT) Analysis Chart

Click here to review the latest Put Options Selling Tool analysis for Microsoft Corporation.

Next Earnings Comments

Next earnings are Jan 23 2023 which analysts have reduced to $2.29 a share on revenue of $53 billion. This is below last year for the second quarter when Microsoft reported $2.48 a share but on revenue of $51.7 billion. That means in January Microsoft is expected to report a lower per share earnings but higher revenue.


Trade Details

TRADE SUMMARY: Credit Put Spread
Equity: Microsoft Stock (MSFT)
Approx Price At Entry: $241.50
Expiry: Dec 16 2022
Next Earnings: Jan 23 2023
Potential Profit: $923.00
Potential Return: 2.6%

TRADE DETAILS:
Short Puts: Sold 10 put contracts for Dec 16 2022 expiry at the $205.00 put strike for an average of $1.083 = $1,083.00

Long Puts: Bought 10 put contracts for Dec 16 2022 expiry at the $170.00 put strike for $0.16 = ($160.00)

Spread Details: This forms a $35.00 credit put spread returning 2.6% earning $923.00 if held to expiry on Dec 16 2022

Buy To Close Early Offer: I am offering $0.42 to start and will reduce that amount as the trade moves toward expiry on Dec 16 2022

TRADE STATS:
Put Strike Sold: $205.00
Potential Profit: $923.00
Potential Return: 2.6%
Credit Put Spread Size $35.00
Approx Percent Of Protection: 15.1%
Equity Would Have To Fall To Reach Short Put: $36.50
Capital In Use: $35,000.00


For investors who would not own shares or not want to roll a position forward, a stop-loss is an idea to consider in a market sell-off. This strategy sets up how much of a loss an investor is willing to take before getting out. For example, if a put contract was sold for $1.00 an investor might be willing to take a 50% loss. The stop-loss would therefore be set at $1.50. If the put contract reaches $1.50 then the investor is “stopped” out, locking in a loss but also limiting the potential for further losses if the stock continued to fall further.


Comments:

Remember, I check the Put Options Selling Tool Analysis daily for this stock and watch for a change in trend. If the trend changes I usually buy back the short puts but hold the long puts for a couple of days just to see if their premium will increase before selling them. Click here to review the latest Put Options Selling Tool analysis for Microsoft Corporation.


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Disclaimer: There are risks involved in all investment strategies and investors can and do lose capital. You always trade at your own risk. The Retiring Easy Portfolio is designed for entertainment purposes only and not financial advice or a recommendation. It is designed to study whether an investor could augment a pension through a handful of trades each month to live comfortably in retirement years. Remember there are risks involved in every trade. Trade only within your level of expertise and comfort zone. Read the full disclaimer.