At Tier 1 Investments, a Motley Fool Real-Money Portfolio, I seek out and invest in elite businesses. These include companies with the strongest competitive advantages, largest growth opportunities, and best management. It's an investment philosophy that has significantly outperformed the market, with Tier 1 earning a time-weighted return of 91.84% since inception on Sept. 1, 2011, compared to the S&P 500's 74.42% return during that time.

Back in September 2013, I added Facebook (META -0.43%) to the Tier 1 Portfolio. At the time, I felt that an excellent leadership team led by founder and CEO Mark Zuckerberg had the social media giant well positioned to profit from the enormous global growth opportunities that lay ahead for the company, and that management was widening the already deep moat around Facebook's network. That all remains true today.

In March of this year, I increased Tier 1's ability to profit alongside Facebook by doubling its written put position. With Facebook's share price rising sharply since that time, we can capture more than 96% of the potential profit on the position by closing our option trade today.

You might be asking why I would close the position now, with Facebook shares trading above $78 and the strike price for the written puts at only $50 per share. If we simply hold the position to its Jan. 17, 2015, expiration date, it's very likely the written puts will expire worthless and Tier 1 would earn the full 100% of option premium. While that's true, there is the possibility, however unlikely, that Facebook's shares could plunge between now and Jan. 17. And so the prudent decision is to close the trade and take profit now.

In addition, the risk/reward scenario at this point is much less favorable than when I doubled our Facebook written put position in March, and even less so than when I first initiated the position in September. The actual dollar amount of the premium left to be earned is only about $26 on the combined position, compared to more than $1,364 when I placed these option trades. On a look-through basis, total capital at risk is $10,000. The $26 therefore represents a less than 0.3% potential return over the nearly four months until expiration.

We can do better.

When I increased Tier 1's written put position in March, Facebook's shares were down more than 20% from their 52-week high as skeptics mocked the company's acquisition strategy after its multibillion-dollar buyouts of WhatsApp and Oculus. But Tier 1 had a different take.

While I acknowledged that the price tags of these two acquisitions seemed rich, I noted that Facebook also received similar criticism for its Instagram acquisition, which is now widely considered a success. I explained that it would likely take longer for us to know whether buying WhatsApp and Oculus were also wise decisions, but that both acquisitions had tremendous potential. WhatsApp was particularly interesting because it gave Facebook access to its then-450 million active users, 72% of whom used the service on a daily basis. It also gave Facebook ownership of WhatsApp's global communications platform, which processed a massive number of messages that was at the time already believed to be roughly equal to the total volume of SMS messages.

I also stated that although Oculus didn't quite seem to fit with Facebook's stated mission to "make the world more open and connected," I was intrigued by the many potential uses for the company's virtual reality technology, as well as the future applications its talented team could produce as part of Facebook's seemingly ever-expanding empire.

While I admitted that at first glance, WhatsApp and Oculus did not seem to be worth their respective $19 billion and $2 billion price tags, I stated that "Zuckerberg and his team have earned my trust, and I will be patient as I wait to see his vision come to fruition." 

Six months later, it appears the market has also grown more patient -- as well as more optimistic about Facebook's future growth potential -- with the stock once again trading near its all-time high. 

The challenge, however, is that Facebook is no longer the bargain it was back in March, and even less so than it was in September 2013. That is another reason why I will close Tier 1's written put position in Facebook (though not until at least 24 hours after this article is published -- standard operating procedure for The Motley Fool's Real Money Stock Picks program that is designed to give Fools the opportunity to buy ahead of us should they so choose).

Yet I still see value in Facebook's shares. The question now is how best to capture that value. Should we write more puts? Maybe buy calls? Or maybe the best option is simply to buy shares. I'll be making my decision soon, but I'd love to hear what you think, so please share your thoughts in the comments section below. And if you'd like to be one of the first to know what Tier 1's next Facebook investment will be, and receive all of our new buy and sell alerts, you can connect with us on Twitter @Tier1Investor.