How to Calculate Rolling-Up Cash-Secured Put Trades: The BCI Trade Management Calculator + $50.00 Discount Coupon


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When we roll-up our cash-secured put trades, we are required to place additional cash into our brokerage accounts to secure the higher strike 2nd trade. This article will detail how to accurately calculate both initial and rolling-up trades using the BCI Trade Management Calculator (TMC).

Real-life example with Super Micro Computer, Inc. (Nasdaq: SMCI)

  • 5/16/2023: SMCI trading at $142.11
  • 5/16/2023: Sell 1 x $135.00 (OTM) 6/202023 put at $4.09
  • 5/18/2023: SMCI now trading at $161.29
  • 5/18/2023: BTC 1 x $135.00 6/2/2023 $135.00 put at $2.00
  • 5/18/2023: STO 1 x $140.00 6/2/2023 put at $4.65

SMCI: 10-day price chart showing the 2 trade dates

SMCI: Pre-rolling calculations

Note the following:

  • The initial return is $409.00 or 3.12%
  • The capital required to secure the put is $13,091.00 [(put strike – put premium) x 100]

TMC showing both initial and rolled-up trades

Note the following:

  • Top Section: We enter data at the time of the initial trade and rolling-up exit strategy. $2.65 represents ($4.65 – $2.00)
  • Middle Section: The return on the 1st trade is 3.12% and on the second, 1.93%. The spreadsheet will reflect a 2nd investment of $13,735.00 (brown cells), which includes the original $13,091.00, so a capital adjustment will need to be made to enable us to accurately calculate total portfolio % returns
  • Bottom Section: Confirms that if no other trade adjustments are made, the returns are 3.12% + 1.93% before capital adjustments to accurately assess total portfolio returns (both trades combined)

TMC: Capital adjustment section

Note the following:

  • Section 1: Before using the capital adjustment section, the total portfolio investment inaccurately reflects a total investment of $26,826.00 and a total portfolio return of 2.51%
  • Section 2: In the capital adjustment section, we enter a -$13,091.00 (brown cell in mid-section- hard to read in chart), since that amount is already included in the $13,735.00
  • Section 3: After using the capital adjustment section, the total capital invested now reflects the accurate amount, $13,735.00 (brown cell on bottom) and a final total portfolio return of 4.91%

Discussion

When rolling-up our cash-secured put trades, additional cash is required to secure the higher put strike. When using 2 lines in the TMC spreadsheet for initial and rolling-up trades, the capital adjustment section must be utilized to get accurate total portfolio % returns.



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This is the only spreadsheet in existence that allows the user to enter covered call writing and cash-secured put trades, receive initial trade and portfolio calculations, execute > 20 exit strategy trade adjustments and then calculate final post-adjusted trade and portfolio results. This is an absolute must for all covered call writers and sellers of cash-secured puts.

For 1 week, we are offering a $50.00 discount on this package using coupon code: TMC-50. Be sure to click on “apply” or “submit” before executing the order.

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Your generous testimonials

Over the years, the BCI community has been incredibly gracious by sending our BCI team email testimonials sharing stories as to what our educational content has meant to their families. Moving forward, we have decided to share some of these testimonials in our blog articles. We will never use a last name unless given permission:

Alan,

Your notes on the premium report 1st page, especially the BCI comments, have really helped in this current market.

My trades are all positive gains in the short time I have been using the Trade Management Calculator. In the money calls are managed so much better now.

Thanks,

JB

Upcoming events

1. Orlando Money Show Live Event

45-minute workshop: Monday October 30th 2:10 PM ET – 2:55 PM ET

Selling Cash-Secured Puts and Strategy Choices After Exercise

2-hour MoneyMasters Class: Tuesday October 31st 9:30 AM ET – 11:30 AM ET

How to Master Covered Call Writing:

A detailed start-to-finish analysis using real-life examples.

Details & Registration information here.

2. BCI-only webinar (all invited to our 500 Zoom maximum)

Thursday November 9, 2023

8 PM ET – 9:30 PM ET

Click here to register.

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Selling Cash-Secured Puts: Multiple Applications

Selling cash-secured puts is a low-risk option strategy geared to generating cash-flow, but always with capital preservation in mind.

This presentation will detail the strategy, incorporating the 3-required skillsets necessary to achieve the highest levels of returns … stock selection, option selection and position management.

If we allow exercise of the put options, shares are put to us at a price we agreed upon. What is our next step? This seminar will discuss potential paths we can take and the rationale behind these decisions, using real-life examples and calculations.

Q&A will include covered call writing, cash-secured puts and related strategies.

Zoom link will be sent to all those who register.

3. AAII Orange County, California Chapter

AAII Investment Club members only

Saturday November 11, 2023

Details to follow.

4. Long Island Stock Traders Meetup Group

Thursday February 15, 2024

7:30 PM ET – 9:00 PM ET.

Details to follow.

Alan speaking at a Money Show event*********************************************************************************************************************