I had a mixed options expiration for May. While two of my naked puts finished with a full profit, the third contract lost more than I gained on the first two. My one IWM May $159 naked put expired worthless and since it wasn’t close to being assigned, I left it to devalue without closing it. My one FB May $160 naked put was in the same boat. It was even further from being assigned, which is why I sold its replacement a week ago. On the downside, my one GS May $265 naked put is nearly $27 in the money and will be assigned this weekend.

My realized gain on the FB May naked put will be the full $424.32 I brought in on March 21. The realized gain on my IWM May naked put will be $434.37, the full amount received on March 16. My beating on the GS naked put will be reduced by the $784.31 I received from the put on March 16. This amount won’t show in my gains for the month because I’ll roll it into my price paid for the shares. It’ll show when I sell the shares eventually.

To help cut the cost of my GS cost per share, I sold a covered call this morning, knowing I’d own the shares on Monday morning. While GS was trading at $238.08, I sold one GS July $245 covered call for $5.15 and received $514.32 after paying $0.68 in commission. I almost went for the $250 strike, but I wanted to lock in more premiums versus hoping GS would climb above $250. If it stays below $250, but the covered call is in the money, I might roll it out and up, but could go ahead and take my overall loss and move on. I think GS will recover before the end of the year, but it’s definitely showing weakness for now and is in the middle of its descending trading channel. Based on this channel, I might regret selling the strike as high as I did. Best case, GS rallies and I take a loss overall, but gain another $1,200 from today’s price, including the premium.

After dealing with GS, I moved to my IWM position. While IWM was trading at $162.00, I sold one IWM July $161 naked put for $3.11 and received $310.32 after paying $0.68 in commission. I hesitated to sell this put or at least second guessed selling the strike as high as I did since IWM is up $13.68, 9.2%, from its April 2 intraday low. In fact, IWM is trading at an all-time high today. That’s not where I like to sell puts usually. I prefer to catch a bounce when possible.

If IWM stays above my strike, I’ll make 1.97%, 11.23% annualized. I wanted to be above a 10% annualized return, so I didn’t sell a lower strike. However, I have a cushion of only 2.56% before I take a loss on weakness in the small-cap sector. I decided to go ahead and sell this put rather than wait for another price correction since I’m not fully invested in my account right now. If IWM drops, I still have some cash available to buy more IWM or another position at a reduced price. If IWM stays flat or climbs, I’ll be happy I didn’t delay my trade while waiting for a better entry point.

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