The Money Tree

Safely Generating Income in Retirement

Update – VXX

Posted by mounddweller on May 20, 2012

Fellow Traders,

I want to give you an update on my naked put trade on VXX.  I initiated this trade back on 2/29, selling the MAR $22 puts when VXX was over $24.  Since  then VXX has dropped to as low as $15.84.  I’ve continued to roll my puts, first to APR, then MAY.  Last week, although VXX has recovered substantially, it still looked like it was going to stay under $22.  Consequently, I rolled the MAY $22 puts out and down to the JUL $21 for a net credit of $311.05.  As it turned out I rolled a couple of days early.  VXX closed Friday at $22.36.  However, since I don’t posess the ability to see into the future, I’m still happy with my trade.  In just under three months I’ve taken in $1318.17 in premiums against my capital requirement of $11,000.

Regards,

Troy

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