Three positions expired out of the money over the weekend.

music selection:  “Brass In Pocket” — The Pretenders

weigh-in:  200.4 (1.2) – so close!

A covered call in Target (TGT) expired out of the money over the weekend.  This morning I sold TGT180608C00077000 for 1.10 a share.  The trade will be in force for 40 days and yields, on an annualized basis, an expected 13.04%.  A fair return for a sleepy stock.

A covered call in Blackstone (BX) expired out of the money over the weekend.  This morning I sold BX180608C00035000 for 4 cents a share.  The trade will be in force for 40 days and yields, on an annualized basis, an expected 1.04%.  This is a pitiful return but it is more than I would get for just holding the stock.  I also remain eligible to collect the underlying 11% yield.

The short leg of a diagonal call in Lam Research (LRCX) expired out of the money over the weekend.  I sold LRCX180615C00215000 for 1.20 a share.  The trade will be in force for 47 days.  Against the 129.80 cost basis of my long leg, the trade yields an expected 7.18% annualized.  The combined trade is currently down 2,532, mostly in unrealized capital losses.

Market commentary: The yield on the 10 year Treasury recently breached 3.00%.  If this level persists or goes even higher, it could mean disaster for hundreds of US companies that are over-leveraged and will not be able to roll their bonds.  It is time to watch your stops closely.  If the yield curve inverts, I will be tightening stops and using stop outs to raise cash, e.g. I will not be redeploying proceeds until the market gives a ‘safe’ signal.

Devour your prey raptors!

Monday Trades

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