The market was very upbeat during the last few days of the Thanksgiving week. We set our all-time high portfolio value due to the rapid rise, before a quick descent, of Appian (APPN) – which briefly traded around $200 on Friday before tumbling this week to roughly $135. Don’t cry for shareholders like me. APPN began November around $60 – we’re doing just fine.
On November 25, three of our options were closed on standing limit orders. We more than doubled our money on a long-dated Planatir (PLTR) call option. I had hoped to amend the order to allow this position more room to run but found our order filled just before market close. We bought our January 2023 call option contract (Strike $22) for $585.95 and closed it for $1589.01. On the 13 day trade we netted 171.2%.
Our RedFin (RDFN) contracts close on 11/25 as well. We netted $87.25 for two put option contracts (strike: $35, expiration: 18DEC2020). Over the 12 days we held the short position we earned 1.2% (37.9% annualized). We had only sold our Unity Software (U) short put option contract (strike: $90; expiration: 15JAN2021) for two days before it closed on 25NOV2020 but we netted almost $100 or 1.1% (200% annualized).
Black Friday also closed three positions for us though two were identical put option contracts for Emergent BioSolutions (EBS) (strike: $65; expiration: 18DEC2020) initially sold two days apart. We held the EBS contracts for 7 and 9 days and earned 1.7% (87.1% annualized) and 1.5% (61.5% annualized), respectively, on the $6,500 required to collateralize each contract. We also closed our Match.com (MTCH) put option contract on 27NOV2020, netting $148.61 or 1.3%, 47.2% annualized, on the $11,500 collateral. We held the short position in MTCH contract for just ten days and retired it well before the 15JAN2021 expiration.
On Monday, 30NOV2020, our covered call option contract on Cintas (CTAS) (strike: $400; expiration: 18DEC2020) was closed for $75.69 netting $98.61. We held the position for 17 days and I am glad to have closed the covered call because I do not want to trigger capital gains tax on my CTAS shares. Even after trimming our CTAS stake, the uniform supplier remains one of our top three holdings. And the shares have performed quite well this year.
With such market exuberance in November (the NASDAQ 100 is up around 13%, the S&P500 has advanced about 11%) I hesitate to expose much of our portfolio to downside risk. Before I sold a Zscaler put option contract (strike $120; expiration: 15JAN2021) this morning we held 17.4% of our portfolio in cash. As market sell off I tend to provide downside insurance in the form of short put option contracts because premiums seem to be more attractive and the entry point, if were shares to be distributed, would be much more attractive.