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AMCR Backtest Cash Secured PUT Updates

Backtested: AMCR CSP – Too much time to expiration

AMCR moved too fast in the direction of the trade, too much time left also meant little profit remaining for an extra risk.

AMCR is a trade that shows what happens when you sell way too many days to expiration. I like the stock and I wouldn’t mind to be assigned, this also has been trading around $10 and $12 for a very long time.

I opened this trade on March 18, 2021, with expiration on May 21, 2021 . That’s 64DTE, but a few days later it was already 50% profitable.

Good practices told us that we should close now, but what’s the problem? Not enough volume at this level, and and too much value remaining so you’ll have to close at the PUT bid price which was $0.15 at the time.

This leaves a big chunk of profit in the table, but you have to take it or wait with that collateral stuck for 2 extra months until expiration, knowing that for $2-$3 extra you’ll be exposed to all the down side as well. After trying to close it for the PUT ask price of $0.10 for a few weeks finally I decided to take out the risk from the trade and just close it at market price, which the broker executed at $0.13.

This means we get a 48% profit from the trade, but if we open this on 30-45DTE rather than 60+ it could have been 60%.

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