Sometime last week or the week before, I entered a limit order to take a profit on my UWM naked put. While UWM was trading at $121.05, I bought to close one UWM July $100 naked put for $0.35 and paid $35.34 including $0.34 in commission. At $0.35, I had only 0.34% of upside potential, which is 3.64% when annualized. UWM would’ve had to fall 17.67% for me to take a loss on it. While that’s very unlikely, it’s possible and for $35.34. I decided to remove the risk and look for a more profitable trade. Hopefully, I get to that trade tomorrow. I have a limit order on a TLT call vertical spread, but might change it to a ratio spread, even if it’s just an odd ratio, such as six short and four or five long calls to hedge it. I know I won’t go into it naked like I did last year, but want to take advantage of the elevated TLT price.

For this UWM trade, I walked away with a realized gain of $394.41. I’d like to sell another UWM naked put far out of the money again, but would prefer to make that trade on a down day for the leveraged ETF versus a day it gains 1.5%.

(I’m not going to bother making a YouTube video on this one alone since there wasn’t much to it, but will mention it in my next video if I remember.)

Source link