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Monday, January 4, 2021

Options Update: December 2020 (Part 1)

Welcome to my final Options Update article of 2020. With these updates, I keep track of my options income, summarize trades, and provide a running tally of DivGro's options income to date.

I failed to achieve my 2020 goal of collecting at least $24,000 in options income. This year turned out to be a much more challenging year for options trading than 2019! 

In December, I executed many trades, many of them defensive trades to avoid assignments and to improve my options portfolio for the coming year. In Part 1, I'll cover trades in which I rolled forward options. Part 2 will present new covered calls and put contracts, as well as closing trades. Finally, Part 3 will present assignments, expired options,  and a list of upcoming expiring options. 

Recap


In December, I closed five options early and had two assignments and fifteen expirations. Additionally, I rolled forward 23 options and had 29 income-generating trades:


Rolled Options

    
Rolling forward options means buying back an option and selling another option with a later expiration date. You can do this to avoid options assignment for in the money options or to collect more options income for out of the money options.

#5622020-12-11:-4×AAPL 19 Mar 2021 $85.00 P $       269.00 ( $          -1.50 )
#5042020-08-21:4×AAPL 15 Jan 2021 $75.00 P $       371.00 ( $        -47.14 )→ #562

On 11 December, Apple Inc (AAPLtraded above $120 per share, some 60% above the $75 January 2021 put options I'd sold earlier. With the options so deep out of the money, I decided to roll forward the options to the 19 March 2021 expiration date, simultaneously increasing the strike price to $85. The trade cost about $47 to execute and I collected about $267 for selling the March 2021 puts. I secured $371 of options income by buying back the January 2021 puts.  

#5632020-12-11:-2×CMCSA 19 Mar 2021 $45.00 P $       216.00 ( $          -0.73 )
#5432020-10-19:-2×CMCSA 15 Jan 2021 $40.00 P $       190.00 ( $        -23.60 )→ #563

On 11 December, Comcast Corporation (CMCSA) traded above $50 per share, some 25% above the $40 January 2021 put options I'd sold earlier. With the options so deep out of the money, I decided to roll forward the options to the 19 March 2021 expiration date, simultaneously increasing the strike price to $45. The trade cost about $24 to execute and I collected about $215 for selling the March 2021 puts. I secured $190 of options income by buying back the January 2021 puts.  

#5642020-12-11:-1×HRL 18 Jun 2021 $52.50 C $       108.00 ( $          -0.69 )
#4632020-03-18:-1×HRL 15 Jan 2021 $52.50 C $       520.00 ( $          -7.93 )→ #564

On 11 December, Hormel Foods Corporation (HRL) traded around $47 per share, some 10% below the $52.50 January 2021 call option I'd sold earlier. With the option deep out of the money, I decided to roll forward the option to the 18 June 2021 expiration date. The trade cost about $8 to execute and I collected about $107 for selling the June 2021 call. I secured $520 of options income by buying back the January 2021 call. 

#5652020-12-11:-2×ICE 19 Mar 2021 $95.00 P $       316.00 ( $          -1.38 )
#4592020-03-16:-2×ICE 15 Jan 2021 $75.00 P $    2,235.00 ( $        -38.00 )→ #565 

On 11 December, Intercontinental Exchange, Inc (ICE) traded above $108 per share, some 44% above the $75 January 2021 put options I'd sold earlier. With the options so deep out of the money, I decided to roll forward the options to the 19 March 2021 expiration date, simultaneously increasing the strike price to $95. The trade cost about $38 to execute and I collected about $315 for selling the March 2021 puts. I secured $2,235 of options income by buying back the January 2021 puts.  

#5662020-12-11:-1×INTC 18 Jun 2021 $60.00 C $       143.00 ( $          -0.64 )
#5352020-09-29:-1×INTC 15 Jan 2021 $60.00 C $       102.00 ( $        -11.72 )→ #566 

On 11 December, Intel Corporation (INTC) traded around $49 per share, some 18% below the $60 January 2021 call option I'd sold earlier. With the option deep out of the money, I decided to roll forward the option to the 18 June 2021 expiration date. The trade cost about $12 to execute and I collected about $142 for selling the June 2021 call. I secured $102 of options income by buying back the January 2021 call. 

#5672020-12-11:-1×JNJ 19 Mar 2021 $130.00 P $       155.00 ( $          -0.64 )
#5062020-08-21:-1×JNJ 15 Jan 2021 $120.00 P $       136.00 ( $        -10.43 )→ #567

On 11 December, Johnson & Johnson (JNJ) traded above $152 per share, some 27% above the $120 January 2021 put option I'd sold earlier. With the option so deep out of the money, I decided to roll forward the option to the 19 March 2021 expiration date, simultaneously increasing the strike price to $130. The trade cost about $10 to execute and I collected about $155 for selling the March 2021 put. I secured $136 of options income by buying back the January 2021 put.  

#5682020-12-11:-1×MMM 19 Mar 2021 $150.00 P $       260.00 ( $          -0.64 )
#4602020-03-16:-1×MMM 15 Jan 2021 $130.00 P $    2,344.00 ( $        -15.33 )→ #568

On 11 December, 3M Company (MMM) traded around $173 per share, some 33% above the $130 January 2021 put option I'd sold earlier. With the option so deep out of the money, I decided to roll forward the option to the 19 March 2021 expiration date, simultaneously increasing the strike price to $150. The trade cost about $15 to execute and I collected about $260 for selling the March 2021 put. I secured $2,344 of options income by buying back the January 2021 put.  

#5692020-12-11:-2×MO 18 Jun 2021 $50.00 C $       161.00 ( $          -0.73 )
#4972020-07-24:-2×MO 15 Jan 2021 $50.00 C $       130.00 ( $        -12.31 )→ #569

On 11 December, Altria Group, Inc (MO) traded around $42 per share, some 16% below the $50 January 2021 call options I'd sold earlier. With the options deep out of the money, I decided to roll forward the options to the 18 June 2021 expiration date. The trade cost about $12 to execute and I collected about $161 for selling the June 2021 calls. I secured $130 of options income by buying back the January 2021 calls. 

#5702020-12-11:-2×PSX 19 Feb 2021 $60.00 P $       544.00 ( $          -0.28 )
#5422020-10-16:-2×PSX 15 Jan 2021 $50.00 P $       890.00 ( $        -57.96 )→ #570

On 11 December, Phillips 66 (PSX) traded around $69 per share, some 38% above the $50 January 2021 put options I'd sold earlier. With the options so deep out of the money, I decided to roll forward the options to the 19 February 2021 expiration date, simultaneously increasing the strike price to $60. The trade cost about $58 to execute and I collected about $544 for selling the February 2021 puts. I secured $890 of options income by buying back the January 2021 puts.  

#5712020-12-11:-2×SBUX 19 Mar 2021 $85.00 P $       214.00 ( $          -1.28 ) 
#4612020-03-16:-2×SBUX 15 Jan 2021 $65.00 P $    2,603.00 ( $        -10.62 )→ #571

On 11 December, Starbucks Corporation (SBUX) traded around $103 per share, some 59% above the $65 January 2021 put options I'd sold earlier. With the options so deep out of the money, I decided to roll forward the options to the 19 March 2021 expiration date, simultaneously increasing the strike price to $85. The trade cost about $11 to execute and I collected about $213 for selling the March 2021 puts. I secured $2,603 of options income by buying back the January 2021 puts.  

#5722020-12-11:-5×T 18 Jun 2021 $37.00 C $       195.00 ( $          -2.43 )
#5022020-07-24:-5×T 15 Jan 2021 $35.00 C $       232.00 ( $        -64.90 )→ #572 

On 11 December, AT&T (T) traded around $31 per share, some 11% below the $35 January 2021 call options I'd sold earlier. With the options deep out of the money, I decided to roll forward the options to the 18 June 2021 expiration date, simultaneously increasing the strike price to $37. The trade cost about $65 to execute and I collected about $193 for selling the June 2021 calls. I secured $232 of options income by buying back the January 2021 calls. 

#5732020-12-11:-3×TJX 16 Apr 2021 $50.00 P $       248.00 ( $          -1.84 )
#4622020-03-16:-3×TJX 15 Jan 2021 $45.00 P $    2,450.00 ( $        -46.66 )→ #573 

On 11 December, The TJX Companies, Inc (TJX) traded around $66 per share, some 47% above the $45 January 2021 put options I'd sold earlier. With the options so deep out of the money, I decided to roll forward the options to the 16 April 2021 expiration date, simultaneously increasing the strike price to $50. The trade cost about $47 to execute and I collected about $246 for selling the April 2021 puts. I secured $2,450 of options income by buying back the January 2021 puts.  

#5742020-12-11:-2×XOM 16 Apr 2021 $37.50 P $       327.00 ( $          -0.73 )
#5612020-11-30:-2×XOM 15 Jan 2021 $35.00 P $       128.00 ( $        -42.19 )→ #574

On 11 December, Exxon Mobil Corporation (XOM) traded above $43 per share, some 23% above the $35 January 2021 put options I'd sold earlier. With the options so deep out of the money, I decided to roll forward the options to the 16 April 2021 expiration date, simultaneously increasing the strike price to $37.50. The trade cost about $42 to execute and I collected about $326 for selling the April 2021 puts. I secured $128 of options income by buying back the January 2021 puts.  

#5752020-12-18:-2×ABBV 21 Jan 2022 $120.00 C $       857.00 ( $          -0.74 )
#4092019-11-13:-2×ABBV 15 Jan 2021 $90.00 C $    1,310.00 ( $   -2,759.24 )→ #575 

On 18 December, AbbVie Inc (ABBV) traded around $104 per share, some 16% above the $90 January 2021 call options I'd sold earlier. With the options deep in the money, I decided to roll forward the options to the 21 January 2022 expiration date, simultaneously increasing the strike price to $120. The trade cost about $2,759 to execute and I collected about $856 for selling the January 2022 calls. I secured $1,310 of options income by buying back the January 2021 calls. 

#5762020-12-18:-3×ADM 18 Jun 2021 $60.00 C $       156.00 ( $          -1.84 )
#5272020-09-29:-3×ADM 18 Dec 2020 $50.00 C $       300.00 ( $        -18.59 )→ #576 

On 18 December, Archer-Daniels-Midland Company (ADM) traded around $49 per share, some 2% below the $50 December 2020 call options I'd sold earlier. With the options slightly in the money, I decided to roll forward the options to the 18 June 2021 expiration date, simultaneously increasing the strike price to $60. The trade cost about $19 to execute and I collected about $154 for selling the June 2021 calls. I secured $300 of options income by buying back the December 2020 calls. 

#5772020-12-18:-1×ADP 20 Aug 2021 $200.00 C $       595.00 ( $          -0.70 )
#5282020-09-29:-1×ADP 15 Jan 2021 $160.00 C $       185.00 ( $   -1,886.77 )→ #577 

On 18 December, Automatic Data Processing, Inc (ADP) traded around $178 per share, some 11% above the $160 January 2021 call option I'd sold earlier. With the option deep in the money, I decided to roll forward the option to the 20 August 2021 expiration date, simultaneously increasing the strike price to $200. The trade cost about $1,887 to execute and I collected about $594 for selling the August 2021 call. I secured $185 of option income by buying back the December 2020 call. 

#5792020-12-18:-1×AFL 21 May 2021 $50.00 C $       115.00 ( $          -0.69 )
#5292020-09-29:-1×AFL 15 Jan 2021 $40.00 C   $       100.00 ( $      -456.77 )→ #579

On 18 December, Aflac Incorporated (AFL) traded around $43 per share, some 8% above the $40 January 2021 call option I'd sold earlier. With the option in the money, I decided to roll forward the option to the 21 May 2021 expiration date, simultaneously increasing the strike price to $50. The trade cost about $457 to execute and I collected about $115 for selling the May 2021 call. I secured $100 of options income by buying back the January 2021 call. 

#5812020-12-18:-2×BNS 18 Jun 2021 $55.00 C $       400.00 ( $          -0.68 )
#5312020-09-29:-2×BNS 18 Dec 2020 $45.00 C $       100.00 ( $   -1,670.70 )→ #581 

On 18 December, The Bank of Nova Scotia (BNS) traded around $53 per share, some 18% above the $45 December 2020 call options I'd sold earlier. With the options deep in the money, I decided to roll forward the options to the 18 June 2021 expiration date, simultaneously increasing the strike price to $55. The trade cost about $1,671 to execute and I collected about $399 for selling the June 2021 calls. I secured $100 of options income by buying back the December 2020 calls. 

#5832020-12-18:-2×CMCSA 18 Jun 2021 $60.00 C $       198.00 ( $          -0.73 )
#5392020-10-16:-2×CMCSA 18 Dec 2020 $47.50 C $       202.00 ( $      -747.60 )→ #583 

On 18 December, Comcast Corporation (CMCSA) traded around $50 per share, some 5% above the $47.50 December 2020 call options I'd sold earlier. With the options in the money, I decided to roll forward the options to the 18 June 2021 expiration date, simultaneously increasing the strike price to $60. The trade cost about $748 to execute and I collected about $198 for selling the June 2021 calls. I secured $202 of options income by buying back the December 2020 calls. 

#5842020-12-18:-2×CMCSA 18 Jun 2021 $60.00 C $       196.00 ( $          -0.73 )
#5402020-10-16:-2×CMCSA 18 Dec 2020 $50.00 C $       140.00 ( $      -253.44 )→ #584 

On 18 December, Comcast Corporation (CMCSA) traded around $50 per share, right at the $50 December 2020 call options I'd sold earlier. With the options at the money, I decided to roll forward the options to the 18 June 2021 expiration date, simultaneously increasing the strike price to $60. The trade cost about $253 to execute and I collected about $196 for selling the June 2021 calls. I secured $140 of options income by buying back the December 2020 calls. 

#6052020-12-18:-1×PM 19 Mar 2021 $90.00 C $       193.00 ( $          -0.64 )
#5242020-09-21:-1×PM 18 Dec 2020 $80.00 C $       230.00 ( $      -568.42 )→ #605

On 18 December, Philip Morris International Inc (PM) traded around $85 per share, some 6% above the $80 December 2020 call option I'd sold earlier. With the option in the money, I decided to roll forward the option to the 19 March 2021 expiration date, simultaneously increasing the strike price to $90. The trade cost about $568 to execute and I collected about $192 for selling the March 2021 call. I secured $230 of options income by buying back the December 2020 call. 

#6062020-12-18:-1×RY 16 Jul 2021 $90.00 C $       125.00 ( $          -0.69 )
#5472020-10-19:-1×RY 18 Dec 2020 $75.00 C $       160.00 ( $      -651.02 )→ #606 

On 18 December, Royal Bank of Canada (RY) traded around $81 per share, some 9% above the $75 December 2020 call option I'd sold earlier. With the option in the money, I decided to roll forward the option to the 16 July 2021 expiration date, simultaneously increasing the strike price to $90. The trade cost about $651 to execute and I collected about $124 for selling the July 2021 call. I secured $160 of options income by buying back the December 2020 call. 

#6082020-12-18:-2×TROW 17 Dec 2021 $175.00 C $    1,443.00 ( $          -1.40 )
#4852020-07-16:-2×TROW 15 Jan 2021 $135.00 C $    2,202.00 ( $   -3,154.71 )→ #608 

On 18 December, T. Rowe Price Group, Inc (TROW) traded around $150 per share, some 11% above the $135 January 2021 call options I'd sold earlier. With the options deep in the money, I decided to roll forward the options to the 17 December 2021 expiration date, simultaneously increasing the strike price to $175. The trade cost about $3,155 to execute and I collected about $1,433 for selling the December 2020 calls. I secured $2,202 of options income by buying back the January 2021 calls. 

Concluding Remarks


My year-to-date options income is $15,009, about 62.5% of my goal to collect $24,000 in options income in 2020. This is one goal I did not achieve in 2020!

In Part 1 of this article, I covered 23 trades in which I rolled forward options. Most of these trades involved out of the money options with little remaining options income available. But I also rolled forward several deep in the money covered calls, which was necessary to protect my ownership of the underlying shares. 

Part 2 will present closing trades as well as new covered calls and put contracts, and Part 3 will conclude this article by presenting two assignments, fifteen expirations, and a list of upcoming options expirations. 

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