Piranha Options Trading
TURNING SMALL BITES INTO LARGE PROFITS
HOW I PLAN TO INVEST $1800 THIS WEEK.
April 27, 2020
TNA ETF is on my radar this week. The stock has massive upside potential as the economy rebounds from the virus. I believe that the stock price will rise as the stay at home order is lifted. The option premiums are at an all time high. Below are my options for TNA this week.
TNA Investment $1800 Option#1 (Max profit of $92.00 in 5 days)
Sell TNA $18 put @ $.92 expiration 5/1/2020 (5 days). Net investment $1800 with a Max profit of $92.00 (100 shares per contract x .92 per share in premium collected)
The chart contains the nearest OUT OF THE MONEY 5 day PUT options. One option I have is to sell an $18 puts with May 1 expiration. That will net $92 per contract sold. To Lower my risk I could sell the $17 option instead. This would net $59 per contract and has lower risk as TNA would have to fall below $17 to make the contract executable.
Option Chain for TNA
| SYMBOL | Action | Price | Option | Premium | %Profit | % Success | Max Profit | Max Loss |
| TNA | Sell to Open | $18 | PUT | $0.92 | 5.11% | 61% | $92 | $1708 |
| TNA | Sell to Open | $917 | PUT | $0.59 | 3.47% | 71% | $59 | $1641 |
TNA option#2 Investment $1893.00 (Max profit $257 -13.57% in 5 days)
Buy 100 shares of TNA stock @ 18.93 then sell an 21.00 OUT OF THE MONEY CALL option for additional profit. There is a small chance the the stock will rise more than a dollar or two within the next 5 days, so I like to sell an option that is just above the expected rise in price. The option chain below shows that there is only a 27% chance the stock will rise above 21.00 in 5 days. I will receive the premium regardless of the stock price at expiration. but if it does rise above 21.00, my sell price will be locked at 21.00 plus the .50 premium collected and a 5 day profit of 257.00 less commissions.
| 1893SYMBOL | ACTION | PRICE | PREMIUM FOR SELLING OPTION | MAX PROFIT IF OPTION EXPIRES OUT THE MONEY | % OPTION EXPIRES OUT OF THE MONEY | MAX PROFIT IF OPTION EXPIRES IN THE MONEY | % OPTION EXPIRES IN THE MONEY | MAX LOSS |
| TNA | SELL TO OPEN | $20 | $0.79 | $79.00 | 61% | $187.00 | 39% | $1814 |
| TNA | SELL TO OPEN | $21 | $0.50 | $50.00 | 73% | $257.00 | 27% | $1843 |
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Piranha Options Trading 
$17 put was sold for .97 and closed early 4/28 for .06 making the net profit on trade .91 per share. X 200 shares. $182
Also bought TNA stock 200 shares @18.81 then sold $21 and $22 calls for .43 and .23 respectively.
The stock quickly rose above $25
The mistake was that I panicked believing the stock was going to continue to rise. I bought back my 21 and 22 options for $3.50 and $3.58 respectively a huge loss ($642) Bad Bad error! because the stock ended the week at $19.80. The 21&22 calls would have expired worthless.
Two things learned, on this great opportunity turned bad.
First, if I had just held my original position I would have ended the week up $62 in premium and up $78 in stock value $140 buying back the In the money calls created a loss ($642)
Secondly, I should have waited a few days to sell the calls. It’s better to sell calls when the stock is on an upswing, the sharper the rise, the higher the premiums. If I had waited I could have sold the same calls for $700 profit, which ended up out of the money.
Today, the Net loss for the week ($460), next week hopefully better. 🙂
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