Early this morning, I closed out the 100% Cash-Secured Put position in Boeing Company (ticker symbol BA) at a large percentage loss. The position was established on April 22nd, 2022 (last Friday) by selling one Boeing Put option at the May 6th, 2022 $170.00 strike price at $4.20 per share when the stock price was at $176.71. When the stock was about $155.76 early in this morning's trading, I bought-to-close-out the Put option at $14.50 per share.
The stock declined precipitously when Boeing reported earnings yesterday morning. Their earnings per share loss was much larger than expected and they delayed the initial delivery date of their new 777X by a full year. Part of my investing methodology is to avoid holding positions during earnings releases and I was negligent for not realizing Boeing's impending earnings report prior to entering this position. I will be more diligent before entering future positions to ensure there is no intervening earnings report prior to the upcoming options expiration date.
Some key numbers for this Boeing Cash-Secured Put position were:
Cash-Secured Put Cost Basis: $16,580.67
Net Absolute Loss on Position: $1,031.34
Days Position Held: 6
Absolute Return-on-Investment: -6.22%
Annualized Return-on-Investment: -378.4%
Jeff Partlow (The Covered Calls Advisor)
partlow@cox.net
