Buying To Close

This is a Post from the Symbol Surfing Blog from Fri, Jul 27, 2018.

Today I bought the PCG Jan 18 2019 50.0 Put @ $7.15 to close out the position.

This was a long 7 month trade.

Interestingly enough, the stock price today was $44.70.

The stock price did not move much since Fri, Jan 5, 2018 when it was at $44.29.

I sold the option at $8 and bought it at $7.15.

$8 - $7.15 = $0.85

$0.85 / $8 = 10.625%

The return on the option trade was a little over 10%.

If I had purchased the stock, the return would have been about 1%.

$44.70 - $44.29 = $0.41

$0.41 / $44.29 = 1% plus a couple of dividend payments. Oh wait, PCG suspended it's dividend.

So the stock price return would have been 1%.

This is a situation where selling a put performed better than buying the stock.

What do you think about "Buying To Close"?

Let me know in the comments section!

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Hello! My name is Tom Adishian and I am the creator and developer of Symbol Surfing. I use this site on a daily basis as a time-saving resource to identify trading and investing ideas. If you have a comment, question or suggestion, contact me.

Fri, Jul 27, 2018 PCG @ $43.48