We opened a new put position late Wednesday afternoon. We sold a HollyFrontier (HFC, $40.06) September 2013, $40 strike price put for $2.65 per share. HFC shares had already retreated from a March high of $58.70.
Our break-even price becomes $40 – $2.65 = $37.35 per share. It takes us down to a level that has shown solid support since last summer.
Maximum profit is 100% of the $265 per contract we received upon sale of the put. We will keep this full amount if HFC closes at $40 or higher on Friday Sep. 20, 2013.
If HollyFrontier closes below $40 on expiration date we will be forced to buy 100 shares at a net cost of $37.35 /share.
See full details on all open and closed option positions here.