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Playing HollyFrontier – Selling Another Put

By Market Shadows
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By Paul Price of Market Shadows

Market Shadows’ Virtual Put Writing portfolio already was short one contract of the HFC June 2014, $39 strike price put. That was originally sold as a $40 strike price but it has now been adjusted downward (by the option exchange) twice, by 50-cents each time, to account for special payments that have already gone ex-dividend. Having a lower stirke price is a good thing for traders that are short put options. 

HFC shares were trading at $44.55 at 10:30 am this morning when I noticed we could get a great price for the Jan. 2016 $44 put. 

HFC quote, put prices and 18-month chart

 

We sold one contract of the longer term expiration put and got filled at $8.12 per share. Thus our break-even price is the strike price of $44 minus the $8.12, or $35.88. I also sold these in my personal account to go along with some earlier sales of June 2014, and Jan. 2015 put sales with HFC as the underlying stock.

The June series looks likely to expire. Our break-even level on that one is $35.90. 

Follow all our equity positions and put selling trades. For email notification of our virtual buys and sells, sign up at the top left of the page. 

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Note: The material presented in this commentary is provided for informational purposes only and is based upon information that is considered to be reliable. However, neither PSW Investments, LLC d/b/a PhilStockWorld (PSW) nor its affiliates warrant its completeness, accuracy or adequacy and it should not be relied upon as such. Neither PSW nor its affiliates are responsible for any errors or omissions or for results obtained from the use of this information. Past performance, including the tracking of virtual trades and portfolios for educational purposes, is not necessarily indicative of future results. Neither Phil, Optrader, or anyone related to PSW is a registered financial adviser and they may hold positions in the stocks mentioned, which may change at any time without notice. Do not buy or sell based on anything that is written here, the risk of loss in trading is great.

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