[Options] January Expiration Open Positions Review

Sean McLaughlin
January 3, 2020

As January gets under way, it’s time to review positions with January options that remain open (haven’t already hit profit targets or been stopped out).

Most trades I put on for All Star Options tend to have a minimum duration of 30 days (short premium plays) and often as long as 6-8 months (for long premium plays). As options approach expiration, greeks like theta and gamma start to become my enemy and whipsaw my P/L. Therefore, as options and spreads get into the expiration month, my best practice is to put each position on notice — it’s time to take action.

January positions closed at profit target: $GDX (on 12/17)

January positions closed at a loss: $CMCSA (on 5/30), $CSX (on 5/30), $NYT (on 8/8), $V (on 10/1)

Remaining Open Positions (in order of entry):

  • $TRV Long Jan 165 Calls: Out of the money. Zero bid in these calls. Lotto ticket hold at this point. Will exit if $TRV miraculously levitates to 165 between now and expiration.
  • $CMG Jan 900/1060 Bull Call Spread: CMG is trading below our long calls at the moment, so we'll be looking to exit this position on Monday. There is still some premium to sell in to -- which will begin to rapidly erode away as we approach expiration. Bummer because the stock is finally looking like its ready to begin its next leg higher.
  • $FFIN Long Jan 35 Calls: We entered this trade back on July 24th. We were able to sell half of our position at a double (according to our plan) on October 18th. Our remaining position represents our profit in the trade. Currently, our long calls are slightly out-of-the-money, but there is still premium left in those calls. We'll be exiting this trade on Monday as theta is becoming our enemy. Whatever we collect will represent our total profit in the trade. Either way, it's a win.
  • $ITA Long Jan 240 Calls: These calls are out of the money. Zero bid in these calls at the moment. But given the recent beating of the war drums with news out of Iran, we may be holding a lucky lotto ticket here. This Aero-defense sector ETF could catch fire here in the next couple weeks. Should $ITA trade up to 240, we'll close our position for whatever we can get.

I'm excited for a 2020 filled with excellent trading opportunities. Happy New Year, everyone!

~ @chicagosean

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