I am capitulating.
music selection: “I Miss The Misery” — Halestorm
weigh-in: 226.4 +0.4 – doh!
Back in January, I took assignment of Clean Energy Fuels Corp. (CLNE) at a strike of 12. This has turned out to be a disaster. I sold today for 5.20. I preach here only writing puts on secure and highly profitable companies. But I didn’t follow my own advice. Shares are down 56.67%. Ouch! I did at least collect 2.24 in premiums but my loss is still 38.00%.
Don’t duplicate my dumbo T.Rex move. Limit your put writing to slow moving megacaps that gush free cash flow. Dividend Aristocrats, Big Cheap Tech, and insurance companies with profitable underwriting are much better targets because they rarely decline 56% more than the market.
It is also advisable to stay well diversified. Fortunately, I followed that advice and this was a small position for me. The damage is thus limited. I will be glad to get the remaining capital redeployed into something that produces income.
Devour your prey raptors!