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Write Puts Target (TGT)

Last week’s puts in TGT expired out of the money.

music selection:  “Bezerk” — Eminem

weigh-in:  205.6 (0.8)

Target has been bucking the death of retail theme.  Cash flow and same store sales are up.  But shares have a long way to go to get back to a normal valuation.  I’m using the opportunity of mispricing and fat volatility premiums to write puts.

I sold TGT180309P00077000 for 3.60 a share.  The trade will be in force for 40 days and yields an expected 42.66% annualized while enjoying 4.48% downside protection.  February and March are on pace to be record months for me for writing options for premium income.  The 720 I picked up here certainly helps.

Devour your prey raptors!

{ 2 comments… add one }
  • Chris B January 29, 2018, 8:55 pm

    All these puts seem to leverage you extra long. Have you considered bear spreads to get a more neutral footing?

    • The Lizard King January 29, 2018, 9:14 pm

      That is an interesting idea. Right now, I like being extra long as it is a roaring bull market. When the trend turns, it would make a lot of sense to keep a hedge.

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