Five positions expired out of the money over the weekend.
music selection: “My Own Summer (Shove It)” — Deftones
weigh-in: 196.8 n/c
Scott’s Miracle Grow (SMG), ON Semiconductor (ON), Match Group (MTCH), Ingersol Rand (IR), and Viper Energy Partners (VNOM) all expired out of the money. I am writing new positions against these names for additional income.
Scotts’ (SMG) is really struggling. I am writing a covered call at less than my basis to try to squeeze out some income while I wait for a recovery. I risk getting called away at a loss. I sold SMG181019C00085000 for 30 cents a share. The trade will be in force for 26 days and yields an expected 4.95% annualized.
ON Semiconductor (ON) is in the same boat. Strong company with current share weakness. I am selling ON181019C00021000 under my basis for 15 cents a share. The trade will be in force for 26 days and yields an expected 10.03% annualized.
Match Group (MTCH) took a recent hit when Facebook announced they would enter into competition against the company. The shares have since recovered and then some. This is my number one put writing idea right now and I sold MTCH181019P00055000 for 2.20 a share. The trade will be in force for 26 days and yields an astounding expected 56.15% annualized while enjoying 5.53% downside protection against a decline in share price.
Viper Energy Partners (VNOM) is a best in class oil and gas MLP operating shale wells in premium acreage in the Permian. I bought shares at 39.28 to write out of the money covered calls against. I hope to collect income while earning capital gains for a superior return. I sold VNOM181019C00046000 for 35 cents a share. The trade will be in force for 26 days and yields an expected 12.51% against my cost basis. In the unlikely event my shares are called away at 46, I will earn an annualized return of 148.88%.
Selling options for income makes up 60% of my asset allocation in early retirement. The other 40% is filled with various fixed income strategies which I cover on Fridays.
Devour your prey raptors!