3D Systems - Another Option Trade

Premiums are still paying well on DDD, so we are going to execute the same trade we made for July expiration in August.  On June 18th, we sold July $41 strike Puts for $.75 cents, and they are now worth $.15 cents for an unrealized gain of 80% as of today.

We are selling the August $41 strike Puts with 38 days to expiration for $1.25 each.  Again we will expect these to expire worthless, or pickup the stock at $41 if it trades below $39.75 before August 16th.  DDD is trading at $47.27 today, and buying at $41 would represent a 13% discount from current prices.  Give the current market conditions, volatility is likely to continue, and there is roughly a 20% chance that DDD will drop below $41 by August expiration.

Update on 8/7/2013:   We are buying back the puts at .15 cents to close this trade right now. The stock has recently pulled back from $51 to the $45-46 range, and there's absolutely no reason to stay in and risk the return.  We are locking in a strong gain on this option trade, if the stock continues to drop, those profits will erode quickly as it approaches the $41 strike.