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Update Archer Daniels Midland (ADM)

ADM reported today.

music selection:  “I Want It All” — Queen

ADM’s first quarter profit jumped 47%.   So the stock should be soaring, right?  Nope.  They missed “estimates” and the stock is down almost 9% on the day.  That puts me down about 450 dollars on the two written puts I have outstanding.  The market is really fickle sometimes.  That’s the beauty of options investing though.  You get a margin of safety from your options premiums.  If I had bought the underlying, I’d be down closer to 650 dollars.  And I can still write covered calls to recover from the oops once shares are assigned in early June.  It’s a marathon and not a sprint.

Devour your prey raptors!

{ 3 comments… add one }
  • Jrbroker May 3, 2017, 4:52 pm

    ADM is a dividend aristocrat, so you should be very safe with this assignment while also enjoying steady dividend increases

  • JC May 3, 2017, 9:42 pm

    Hrmm….I might have to look at selling a put on ADM now that shares have dipped. I never really understood the markets’ reaction to earnings. It’s always funny to me when you see just awesome quarters reported by companies but they missed estimates by a bit so the shares sell off. Or when companies didn’t lose as much money as the analysts thought they would have so clearly shares need to pop.

    • The Lizard King May 3, 2017, 10:31 pm

      Sometimes a lizard can’t catch a break. You might do better than I!

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