Today I closed our short position in a Match.com put option contract (MTCH; strike: $130; expiration: 19FEB2021). With just two weeks to expiration MTCH was threatening new highs if not pushing through them and our short-dated contract was able to be closed for just $10.69. I could have waited to let the contract expire but, before checking my available cash balance, I made a trade that took my available cash down to 10.1%. For the low, low price of $10 another 1.6% of our portfolio moves to the available cash column.
The MTCH position was active for 53 days. On 17DEC2021, when we initiated the MTCH put contract position, MTCH shares closed at $148.75; shares trade around $162 today – up nearly 9%. Our contract position earned 3.1% on the $13,000 collateral required to hold the option contract position, or 21.6% on an annual basis. Though our position did not perform as well as the underlying shares, our collateral was 14% less than the capital required to purchase 100 shares on 17DEC2020. MTCH has had a remarkable year (we had 100 shares of MTCH assigned to our portfolio at $77.50 per share on 21FEB2020).
We’ll continue to watch MTCH for opportunities to sell put option contracts or take a long position. I don’t usually write contracts that require more than $13,000 so if MTCH continues to appreciate we may need a different method to assume exposure to MTCH.