As with our Block (SQ) put, let’s spend a few cents to close the top leg of our expiring Costco (COST) bull put spread to remove the risk of a late-day reversal and free up capital for new trades. We will simply watch the bottom leg expire worthless. By closing now, we earn a 2.9% return in three days on the $1,000 in capital we put up, or 353% annualized.
I am also recommending we book profits on our DocuSign (DOCU) put. The premium has fallen by half in just a day, and we’ll earn a 0.4% return, or 76% annualized.
COST Sep Week Five (9/30) 460/450 Put Spread
Current Stock Price: $480.26
Cash in Hand: $0.34
Action:
- Buy to close the COST Sep Week Five (9/30) 460 Put for around $0.05, but adjust as needed to close today
- Watch the COST Sep Week Five (9/30) 450 Put expire worthless
Profit: $0.29, or $29 per spread
DOCU Oct Week One (10/7) 48 Put
Current Stock Price: $56.24
Cash in Hand: $0.40
Action: Buy to close the DOCU Oct Week One (10/7) 48 Put for around $0.20, but adjust as needed to close today
Profit: $0.20, or $20 per contract