On Monday, I wrote puts on PennyMac Mortgage Investment Trust (PMT).

music selection:  “Push It” — Garbage

Previously, I had a buy/write position open on PMT.  It was called away.  The new position violates my 12% rule by a few basis points.  I would have preferred to have gone a strike closer but they were 2.50 apart instead of a dollar.  I’m making do.  I think this particular play is safe and repeatable though, so I’ll stick with it for as long as it lasts.

I sold PMT160115P00015000 for 0.25 a contract.  The trade will be in force 54 days and yields 11.27% annualized.  Spot price was 16.16 when the contract was written providing 8.73% downside protection.  The extra downside protection is what we get in exchange for giving up a little yield by being closer to the money.  I’ll be delighted to get assigned but I don’t think it is likely.

Happy Thanksgiving!

Devour your prey raptors!

Write puts PennyMac Mortgage Investment Trust (PMT)

Never miss another opportunity to devour prey!

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