Today I decided to close a put option contract on Pinterest (PINS; strike: $50; expiration: 19FEB2021). Option prices typically take a significant fall on Mondays but this option contract was closed for $2.69. I did not plan to close the PINS contract before expiration but I can look through the couch cushions to find the three dollars required to reclaim the collateral.
We’ll write another put on PINS when the opportunity presents itself. Our kids own shares in their own portfolios and I’d like to add it to our main portfolio, too.
This trade breaks the recent trend of very short-term positions because we established the short on the PINS put option contract on December 17th, 2020. Since the last week of January, PINS shares have appreciated sharply including rising about five percent as I type this trade summary. Over the 50 day holding period, we earned $136.61 on the $5,000 required for collateral; 2.7% or 19.9% on an annual basis.
Source: MarketWatch.com