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Write Puts Tractor Supply (TSCO)

Initiating a new position in Tractor Supply.

music selection:  “Riders On The Storm” — The Doors

weigh-in:  207.0 (1.2)

Tractor Supply is a specialty retailer that serves rural communities.  It is bucking the death of retail trend with strong sales growth and attractive gross margins.  It is also insulated against competition from Amazon.  Most of the items it sells are large and heavy and cannot be shipped cost efficiently as one off deliveries.  It just doesn’t make any sense to send a wood chipper or fence by UPS.

Today I sold TSCO180209P00080000 for 3.13 a share.  The trade will be in force for 25 days and yields an expected 57.12% annualized while enjoying 4.30% downside protection.  The two contracts provide 626 in options income which has February shaping up as a good month.

Devour your prey raptors!

{ 3 comments… add one }
  • Chris B January 19, 2018, 10:52 pm

    Good timing. These puts are now worth 1.80 – 2.00. Do you close positions early when you have a disproportionate gain in a very short time?

    • The Lizard King January 19, 2018, 11:08 pm

      I’ll let this one ride like I usually do. I find rolling early is a lot of work for not much net gain.

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