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Early Assignment ON Semiconductor (ON)

I have been assigned on my puts in ON.

music selection:  “How Could I Forget” — The Faint

Back on 22JAN2018, I sold puts in ON Semiconductor (ON).  It looked like a good trade before the broad market correction began.  Shares have tanked since that and now trade around 20 a share.  I was assigned today at the 25 strike.

I have not triggered a stop loss in this trade so I’m writing covered calls to earn a little income on what would otherwise be ‘dead money’ for me while I wait for the market to shake off the correction.  I sold ON180316C0002500 for 10 cents a share.  The trade will be in force for 36 days and yields 4.06% annualized.  It doesn’t look like much compared to recent options returns but it beats being parked in 10 year Treasurys by a mile.

On just the underlying, I’m down about 20%.   However, after accounting for options premiums collected on ON so far, I’m only down 11.76%.  My stop loss is currently at 17.61 a share.  I will close the trade if the stock finishes a day below that mark.  Never enter your stops into the market.  You wouldn’t play poker with your cards showing.

Devour your prey raptors!

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