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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Fri, Jul 27, 2018 PCG @ $43.48
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