My 22.5 strike puts on DCP Midstream Partners LP (DPM) were assigned on Saturday.
music selection: “Cumbersome” — Seven Mary Three
weigh-in: 215.2 (1.2) – back on track!
I now hold 600 shares of DPM. That is 300 with a cost basis of 30 and 300 with a cost basis of 22.50. I have collected 4.31 in premium income and distributions on the 30 dollar basis shares. I have also collected 0.40 on the 22.50 basis shares.
I have decided to write covered calls at my cost basis for maximum income. I was able to sell DPM160115C00022500 for 0.60 a contract. Annualized return on 27 days in force is a very strong 36.05%. I am adding that 60 cents to the 22.50 basis shares for return tracking purposes. I have a limit order open on DPM160115C00030000 at 0.05 a contract. That contract might not fill. A fill would indicate an annualized return of 2.25% over 27 days. If it doesn’t fill today, I’ll try an expiry further out to hunt for more liquidity, probably at the cost of some yield. I will not report that trade on the blog but you will be able to see it on the Open Positions tab.
The next four posts will feature new trades, all opened today. That will close out the year and I will open the new year with some changes to the approach of the blog including a first ever transparency post. Look for it on the first or perhaps on the second depending on how much ‘good cheer’ the Lizard King imbibes on New Years Eve.