Sean, from JF’s (Participant) and your postings regarding this transaction I gather JF sold Put options for SLV with a strike price of $22,50 when SLV was trading at $ 22.42. For the sale of the Put option, JF receives a premium of $108 ($ 1.08 X 100 shares). JF then gets the shares Put to him at $ 22.50 (the strike price) and he purchases them. Then, JF sells the shares for $23.47, thereby realizing a gain of $ 2.05 per share comprised of .97 ($23.47 – $22.50) plus $1.08 of option premium received for the sale of the option. His almost 10% profit is actually 9.11% calculated as follows: $2.05 / $22,50. Is my interpretation of this transaction and the resulting gain correct?
Reply To: SLV ProfitsJoeCPA2020-10-22T05:33:09-05:00