Trade Details & Summary

COP Short Put (LIVE Closing Trade)

These single short puts in COP acted as a great hedge for our other bearish bets in oil this month and helped smooth out our returns after we closed them for a nice big profit.


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In this video, I want to go through a closing trade for just a single naked put or a couple of naked puts that we had in COP. This is a COP naked put position that we had put on a little while back. We had put this trade back on 3/4 and it's now the end of March at the time that we're doing this video.

Again, all live real-time trading. We had sold these naked puts, these 36 naked puts in COP, anticipating that implied volatility will go down in oil and that oil would potentially either rally or stay the same. We sold each of these for $97. They're now worth about $20 apiece.

We're looking at about $150 profit on this trade and probably time to take it off. There's 15 days to go till expiration. Not worth holding onto this trade for another, let's call it 15 days, 10 days or so, just to make another $20. We've made the vast majority that we can make on this trade already, holding onto it for about 30 days, a little less than 30 days.

We're going to go ahead and take this trade off. Again, the reason that this thing worked out is because we went ahead and entered this trade back in early March, right before the market actually had a huge bump up in oil prices. But implied volatility was high at that time, so it was up around the 80th percentile. Implied volatility dropping, that really helped this position, and then again, just a rise in the stock price also helped.

We got both things to work in our favor. In our case, we definitely wanted to see the stock price rise, that helped, and we want to see implied volatility drop as well. We're going to go ahead and create that closing order now. Just right-click on it, go over to buy. Again, the market is trading around $20.

The mark right now is around $20, $21. We're going to try to place this order at $20 and fill it immediately which looks like it already did. That order filled almost instantaneously at $20 which is a good round number price. $21 probably would have filled. If we'd stretched the $19, don't know if we would've filled as quickly as we just did at $20.

Sometimes it gets filled right away as you're seeing in some of these videos that we're posting here for live trading. Sometimes we do have to come back in and adjust the trade. But we're now out of the COP naked puts that we sold for $97 and taken in a nice little profit on the day. As always, I hope you guys enjoyed these videos. If you have any comments or questions, please ask them right below. And until next time! Happy trading!

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