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Written Put Blackstone Group (BX)

BX puts expired on Saturday.  I wrote new ones.

music selection:  “Suite Sister Mary” — Queensryche

weigh-in:  209.2 +0.4 – Too much BBQ!

Blackstone Group is quite a lot like a publicly traded hedge fund.  They take in funds from accredited investors and deploy it primarily in real estate investments.  We can participate in the fees they charge by buying the stock.  It is a high yielder but we can do better with options.

I sold BX170825P00034500 for 90 cents a share.  The trade will be in force for 40 days and yields 23.80% annualized.  It also enjoys 2.67% downside protection against a drop in share price.  Assignment will result in a yield over 10% plus the opportunity to profit again with covered calls.

In other news, UVXY split 1:4 today.  Long puts are well in the green but I think I can do better by holding a little longer.

Devour your prey raptors!

 

 

 

 

{ 2 comments… add one }
  • Chris B July 19, 2017, 3:35 pm

    I gave UVXY a try with $300 in fun money and a 3 month duration. Now, after the reverse split, I’m a lot further OTM than before, bid-ask spreads are a joke, and it appears unlikely that I’ll be able to sell my puts before time decay accellerates. The risk profile of the trade changed dramatically. Oh well… my fault for not paying attention and for not buying enough duration. I was gambling on a quick double rather than buying a nearly sure thing double digit return, and that was dumb.

    I also bought some OTM December puts, and they’re doing fine. Lesson learned.

    I’ve noticed UVXY spikes almost on schedule every couple of months and then reverts to a trendline. Do you consider such spikes to be a put-buying signal?

    • The Lizard King July 19, 2017, 7:23 pm

      I used to do as you tried and go for knocking one out of the park. The high percentage bet is the place to be. Believe me on that.

      I don’t consider the spikes to be put buying opportunities. The premium gets “fat” during volatility events thus lowering returns. If you want to sell naked calls (which can be very dangerous!) the spikes are a selling opportunity. I’d keep exposure down to less than 4% of portfolio.

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