This past weekend I wrote in the Trade Ideas category on the FullyInformed members section that one stock appeared ready for a nice trade. Aflac Stock, that wonderful insurance company that I have followed for more than a decade now, continues to create lots of Put Selling and stock trading opportunities.
On Tuesday I bought shares at $51.80 and sold naked puts at the $49 put strike for February options expiry. Today I sold the stock for $53.80 but I am still holding the naked puts.
10 years ago Aflac stock was trading around $32.00 and paying .07 cents a quarter in a dividend. Since then Aflac Stock has had a fairly volatile past with price ranges all over the map.
Aflac Stock 2012 Trades
In 2012 Aflac stock was as low as $38.14 and now it is pushing back towards $54.00. Today Aflac Stock pays .35 cents quarterly. But it isn’t the dividend that interests me. It is the volatility. Aflac stock has on average a 20 day historical volatility of around 24%. This is lower than stocks like Apple Stock which is at 30%. But Aflac Stock is much easier to do Put Selling against with a far simpler trading range to follow and I never am concerned about being assigned stocks in Aflac Stock. At 24% volatility is high enough to keep put options premiums elevated for profitable Put Selling trades.
Investors Should Watch Aflac Stock
Investors should keep an eye on Aflac Stock and add it to their watch lists.
Aflac Stock Options Chain Is Ideal for Put Selling
Aflac stock’s Put Selling chain is ideal for Put Selling as below $50.00 it is almost always in one dollar increments and above $50.00 it is in $2.50 increments. The options spreads between bid and ask are well placed and not wide. Volume in the put options is not high but it is is busy enough that I never have had a problem getting filled.
Aflac Stock Put Selling Chart for 2012
The chart of Aflac Stock for the past 12 months is below. During that period there were 13 possible Put Selling trades which would have ended profitably. All were easy to do Put Selling against. The volatility levels are high enough to make Put Selling profitable and if assigned shares just look back in time to gain confidence in owning the shares for a brief time period.
Alfac Stock 10 Year Chart
Taking time to check out stocks is always worthwhile to see which stocks could be added to a watch list. The 10 years chart of Aflac Stock shows why this stock deserves to be on a watch list for Put Selling and stock trading opportunities. The past 10 years have had excellent Put Selling opportunities and by watching the range levels of between $35 to $47.50 and working to stay within that range, an investor would be well protected from possible loss.
Aflac Stock 10 Year Chart shows enormous Put Selling opportunities
The ten-year chart shows me that I can comfortably continue Put Selling Aflac Stock because I know that I can easily rescue any puts that may get assigned in a stock downturn. Unless something drastic happens at Aflac, the stock is continuing to trade in a reasonable range for put selling. Once the stock moves above $47.50 I know to be careful and to not take chances when Put Selling. I know to stay out of the money.
Anywhere above $55 or $57.50 I know to pull back completely from Put Selling and wait for the stock to return lower. The same strategy can be used below $35. I know that anywhere below $34 I can wait for the stock to bottom and then either pick up shares or sell some in the money puts for income while waiting for Aflac Stock to rise and leave my in the money puts out of the money.
Put Selling Aflac Stock In The Bear
For example, during the last great bear market of 2008 to 2009, Aflac Stock fell to a low of $10.83. Put Selling in the money anywhere between the $20 to $30 put strikes made a lot of sense and earned a lot of profit as the downturn to those low depths was short-lived.
Understanding when stocks sell-off during bear markets that they will recover, makes Put Selling during a panic pretty easy. Some stocks are unduly hurt in a bear market but the last bear was a financial crisis which affected all insurance and bank stocks. However at $11.00, surely anyone could have seen that Aflac Stock was terribly undervalued.
Keep Your Put Selling List Updated
It is always nice to add a new face to a watch list. I keep my watch list with my computer and check it nightly as I look for opportunities in my favorite stocks. This past weekend when I spotted and mentioned on the members site the Aflac Trade possibility I was ready when the markets opened on Tuesday. It’s doesn’t take a lot of work to become a profitable investor and having a watch list makes it even easier.
Aflac Stock Trade Ended
My most recent Aflac Stock Trade ended with great success. I am still holding the Feb naked puts but now that the stock trade is ended I am already looking around for the next opportunity to continue to grow my stock portfolio. Aflac stock has certainly been a great Put Selling friend.
View The Aflac Stock Trades (Members Only)