I wrote a put on CVS
music selection: “Still… You Turn Me On” — Emerson, Lake, and Palmer
weigh-in: 196.8 +0.4
CVS Health Corporation is a vertically integrated health care company. They have recently made vertical acquisitions that are going to allow the company to be more competitive and profitable in future. I am taking advantage by write secured puts for income.
I sold CVS181026P00077500 for 2.45 a share. This trade will be in force for 40 days and yields an expected 28.85% on an annualized basis. At the same time, the trade enjoys 3.14% downside protection against a decline in share price. If assigned, I will write covered calls for additional income while I wait to collect the underlying distribution of over 2%.
The yield curve has still not inverted. I will be tightening stop losses when it does and adding short exposure if the 90 day treasury yield exceeds the 10 year yield.
Devour your prey raptors!