No selling, not buying. People were bidding up the price for insurance against the uncertainty associated with "Brexit" (stupid word) and I was selling that insurance.
I sold the August $4.50 put contract for 30¢. I deal only in cash, no margin. So the money is basically in trust for 60 days and I can't touch it.
Two possible outcomes:
The highest risk outcome is that I end up owning the shares at $4.20, but that's still not as risky as buying the shares for $4.80ish which is where they were entering the trade.
The other outcome is that MDR's stock trades flat to higher which is what happened. Then on expiration I get my cash back as well as keeping the premium I already collected. So that's a net of 6.5% in 60 days for an annualized return of 39%.
Hardest part is to do it again. No one seems to be bidding MDR's options currently. A lot of complacency in the markets in general right now.
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