This trade only took 8 days. Winner Winner Chicken Dinner.

The best trades show a profit immediately and never look back.

Today we will ring the cash register on a recent trade and look for new opportunities to develop capital.

A puts value is mainly the result of changing share price and remaining time till expiration. The put premium will fall each day due to time decay and it will also fall as share prices rise. Costco's rapidly rising share price is giving us a quick win this month.

Here is how last weeks trade of the December 21, $220 puts for about $5.15 is performing.

Costco share price is rocking after forming a double bottom pattern.

This is great for us put sellers.

Right now, the Costco puts trade for just $1.44. So if you close the trade today, you'll earn a $3.71 profit per share. That's a 1.68% return on the trade. And it's 70% of the potential profit… in just eight days.

To hold for the remaining six weeks will only generate another 0.7% return or 5.6% annualized.

Premium for selling the put $5.15
Cost to buy the put back $1.44
Profit on put $3.71
Current gain as a % of purchase obligation 1.68%
Current annualized gains 76%
Remaining gains $1.44
Remaining gains as % of purchase obligation 0.7%
Time to expiration 43 days
Remaining annualized gains 5.6%

This is a great example of managing the trade and not just hoping for the puts expiration. By selling early you lock in an amazing gain and can immediately redeploy capital to earn even more.

Cheers.

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.