Wells Fargo was assigned to me over the last weekend.
music selection: “Piano Man” — Billy Joel
I did a follow up trade on Wednesday. I was able to sell WFC151023C00057500 for thirty cents. This would exit the position at the entry strike if called. Annualized yield is 4.23% over 45 days. Not too shabby.
I hope to retain these shares as Wells Fargo is a screaming buy right now. Recent weakness in the overall market suggests I should be able to hold onto my shares at this strike. It will not be time to seek an exit until shares are trading for two and half times book value, the historical average for the stock.
Devour your prey raptors!
Covered Call Wells Fargo & Company (WFC)
I haven’t added to my WFC in a very long time. Thanks for reminding me with this option trade. I do enjoy reading your options exploits. Will you create a post highlighting your options trade for the year to date? Curious to see/follow how you have done. Thanks for sharing.
Thanks DH. I’ll have to think about a year to date post. Would require some Excel Magic(tm) to extract the full record of what I’ve posted about and not just a full dump.
Thanks for posting this. Looks like a good trade to me
I know you’re not a big fan of asset allocations in the index buy and hold camp that ismost prevalent among the FIRE community. I recently unloaded all my buy and hold portfolios with only some DGI names left to trade options full time (mostly shorting puts in indices and DGI names). Any thoughts on this strategy being better than just holding the 3 fund vanguard?
Thanks Lizard
The main thrust of my strategy is high yield for current income. The idea being you can give up some upside capital gains to pick up security and the ability to retire on a higher withdrawal rate. I do not trade options on 100% of my portfolio; about a third actually. I also keep a good allocation to high yield stocks and especially bonds. That keeps my blended yield around 10%.
I don’t ordinarily write puts on indexes. The yield tends to be very low there. The big cheap tech names (Intel, Microsoft, Cisco, Qualcomm, Apple) are all putting up nice put yields lately and have little downside risk due to strong cash flows and cash hordes on the balance sheets.
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