Now that bankruptcy is out of the picture for a while, it time to milk theta!!
TLDR: When bankruptcy risk was high, I had shifted my options position to lower risk. Now that $Bed Bath & Beyond Inc(BBBY.US$ will have about $1b in cash from financing and cost cutting measures, it is time to be back in the "milk the theta" game.
New position
Sold an "In the Money" PUT option today which had a time value of $70. If BBBY goes above $9.50 this Friday, that would rake in an ROI of 10.7% in 3 days (1.02/9.50). If it doesn't then I would just roll it down and out after milking the $70 time value dry![]()
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Sold an "In the Money" PUT option today which had a time value of $70. If BBBY goes above $9.50 this Friday, that would rake in an ROI of 10.7% in 3 days (1.02/9.50). If it doesn't then I would just roll it down and out after milking the $70 time value dry
position still milking tetha
As for my greedy 3rd shot, as published before, I had roll it down from $15 PUT to a $13.50. The total premium collected is $224, and the theoretical loss for this right now is $176 (using current BBBY share price of $9.50). This contract still have $163 of time value to milk. So once I suck it dry, I will just roll down and out a few more time, until it becomes profitable![]()
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As for my greedy 3rd shot, as published before, I had roll it down from $15 PUT to a $13.50. The total premium collected is $224, and the theoretical loss for this right now is $176 (using current BBBY share price of $9.50). This contract still have $163 of time value to milk. So once I suck it dry, I will just roll down and out a few more time, until it becomes profitable
Position restructuring
On 19 Aug when Ryan Cohen exited BBBY, I did have fear that he did that as he was afraid that BBBY will be announcing bankruptcy soon. So it is better for him to exit with a profit and get fine by SEC a little from insider trading, than to lose hundreds of millions of dollars. Thus, I restructured 10 of ny PUT options with a strike price of $4 and $4.50, to lower the risk I'm taking.
First I closed 5 of my position for a tiny profit of $17 each. This helps to reduce my capital exposure by $2,000.
On 19 Aug when Ryan Cohen exited BBBY, I did have fear that he did that as he was afraid that BBBY will be announcing bankruptcy soon. So it is better for him to exit with a profit and get fine by SEC a little from insider trading, than to lose hundreds of millions of dollars. Thus, I restructured 10 of ny PUT options with a strike price of $4 and $4.50, to lower the risk I'm taking.
First I closed 5 of my position for a tiny profit of $17 each. This helps to reduce my capital exposure by $2,000.
Next, I rolled 5 of my $4.50 PUT to this $2 PUT. So if in the event that, BBBY goes bankrupt, at most I will lose only $1,000 as compared to $2,250. Now that bankruptcy is out of the picture for the time being, I think I will just keep this till 2024, while starting more short term positions.
The total premium collected for this is $210, after rolling it out. So if BBBY is still alive and its share price is above $2, that would be a ROI of 21% in 1.25 years. Otherwise it will be a loss![]()
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The total premium collected for this is $210, after rolling it out. So if BBBY is still alive and its share price is above $2, that would be a ROI of 21% in 1.25 years. Otherwise it will be a loss
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Keithmerel21 : The word you’re looking for is “Theta” not Tetha…
doctorpot1OP Keithmerel21: Hahaha opps spelling error
thanks for point out 
GoLeopard : /Thumbs Up Thanks for sharing your experience. learn something very useful from this, especially how to repair your options and ideas.
doctorpot1OP GoLeopard: no problem
glad it could be of help to you 
JM investor : nice post! I shall start to learn your option strategy here!
doctorpot1OP JM investor: I do write a lot of post on options and how im leveraging on them
hope it will be of help to you 
feel free to ask me anything, if it is within my knowledge I'll share what I know 
