Put Selling And Buying To Close Naked Puts Early

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.

Mcdonalds Stock Mar 28 2013

McDonalds Stock from January 2 to March 28 2013 is up 10.62%

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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