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Monday trades – AFSI, SDLP, NAP

Over the weekend, AFSI and SDLP expired out of the money.

music selection:  “Blame Me” — The Pretty Reckless

weigh-in:  204.4 +0.0

AFSI is a promising insurance company that is suffering under an accounting scandal.  They recently sold the unit that the irregularities occurred in.  I’m down 9.26% in the trade but hope to recover.  Today I sold AFSI171215C00017500 for 15 cents a share.  The trade will be in force for 89 days and yields 3.52%.  My loss in the play falls to 8.40% with the collection of the premium.

Seadrill Partners is a drillship MLP that is struggling with the price of oil.  I got in after the price of shares fell sharply with a cost basis of 3.74.  I’ve been writing a covered strangle on this name for income.  My last strangle expired out of the money over the weekend.  Today, I sold SDLP171020C00005000 for 5 cents a share and SDLP171020P00002500 for 10 cents a share.  Both trades will be in force for 89 days and yield an average of 10.25% annualized.  I remain eligible to collect the underlying distribution of 11.94%.  I judge both contracts as being unlikely to be assigned and plan to repeat the trade at expiry.

Navios Maritime Midstream Partners L.P. (NAP) is a new name for me.  This is a dry goods bulks shipper that has seen recent share weakness.  I think the market is overreacting to the recent weakness in bulk dry goods shipping day rates as Navios has over 90% of its fleet locked into long term contracts.  They can weather this storm.  I sold NAP171020P00007500 for 40 cents a share.  The trade will be in force for 33 days and yields 58.99% annually while enjoying 5.71% downside protection.  I will be happy to get assigned at 7.50 as the underlying yields an additional 23% annually.

Devour your prey raptors!

{ 2 comments… add one }
  • chomper September 18, 2017, 8:36 pm

    Good thing you are in SDLP and not SDRL! I think Seadrill Limited is going bankrupt.

    • The Lizard King September 19, 2017, 12:12 am

      Agreed SDRL is in a lot of trouble. SDLP couldn’t pay a distribution for several months while common creditors worked out the kinks.

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