Last Monday, I wrote a put on QUALCOMM Incorporated (QCOM).
music selection: “Kodachrome” — Paul Simon
weigh-in: 212.6 (2.6) #loser
I covered Qualcomm as an investment earlier in the Big Cheap Tech series. It is still a slam dunk but I’m playing defense and not going with the nearest the money strike. I’m giving up some yield for downside protection. I was able to sell QCOM160129P00043000 for 68 cents. The trade will be in force for 41 days and yields 14.08% annualized. At the nearest the money strike, 38.3% annualized yield was on offer. Versus the spot price of the underlying at purchase of 48.08, the trade has 11.98% downside protection. This is a safe place to be.
The underlying ticker has as of this writing been moving the right way and I expect it to expire safely out of the money. I’ll redeploy the capital into new puts at that time. There is one more post this year which is scheduled to post automatically. I’m having technical difficulties with my PC on-board clock so I’m not sure if it will post on Wednesday or not. I’ll be out of town till Thursday so will not be able to step in with corrective measures if the auto-magic approach futzes out. I’ll be back after the first of the year with the first ever Raptor Transparency Post.
Devour your prey raptors!