On 23NOV2015, I wrote covered calls on SunCoke Energy Partners, L.P. (SXCP).

music selection: “Blow Me Away” — Breaking Benjamin

weigh-in: 216.2 (0.6) Not bad for a week with “Turkey Day” in it.

Previously, I opened a buy/write strategy on SXCP.  A follow up trade saw an addition covered call written.  I’m going back to that well again.  Shares are a little beaten up so yield is weak this time around.  I’m content to hold shares however as this is a great dividend growth story.

I sold SXCP160520C00012500 for 0.05 a contract.  The trade will be in force for 180 days and yields an annualized 0.81%.  Pedestrian compared to most of my trades but still quite a lot more than people who are just holding and not tapping the power of covered calls for bonus yield.

Devour your prey raptors!

Covered call SunCoke Energy Partners, L.P. (SXCP)

Never miss another opportunity to devour prey!

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2 thoughts on “Covered call SunCoke Energy Partners, L.P. (SXCP)

    • December 3, 2015 at 2:52 pm
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      My old finance professor used to say “Daddy always said; you pays your money, you takes your chances.” There is more risk here than with a regulated electric utility. But I’m comfortable with the distribution being withing distributable cash flow. I think a temporary cut could happen with a market hiccup but a permanent cut is unlikely. Here’s why: steel is one of the most essential commodities on the planet. Western civilization stops without it. Steel production will be back. I think a div cut and cratering of price would make SXCP a very strong acquisition candidate as well. The threat of losing MLP status with the service is a bigger threat IMO.

      Reply

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