Last Monday, I wrote a put on Microsoft Corporation (MSFT)

music selection:  “Whiskey in the Jar” — Metallica

The defensive theme continues with this pick.  Annualized yield of 31.7% was on offer by Mr. Market but I took much less to gain downside protection.  I was able to sell MSFT160129P00051500 for 83 cents.  The trade will be in force for 41 days and yields 14.35% annualized.  Against the spot price at the time it was written, this trade has 7.5% downside protection.  That is a lot of wiggle room for slow moving Big Softy over 41 days.  And 14+% is a fine return that well outpaces the long term average of the broad indexes.

Next up on Tuesday, the first ever Raptor Transparency Post.  I’ll be revealing my liquid networth and current withdrawal rate.

Devour your prey raptors!

Write Put Microsoft Corporation (MSFT)

Never miss another opportunity to devour prey!

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3 thoughts on “Write Put Microsoft Corporation (MSFT)

  • December 30, 2015 at 8:50 am
    Permalink

    Hi – happy end-of-2015. Thanks for all your posts this year. I follow along, haven’t really had much to comment recently but am enjoying immensely. Looking forward to the Transparency Post.

    Reply
  • December 31, 2015 at 2:36 pm
    Permalink

    Financial Velociraptor, after reading your fixed income comment on DGI (http://www.dividendgrowthinvestor.com/2015/11/entering-wealth-preservation-mode.html), which is what I am trying to decide at present, I found myself immediately confused when looking at the Fees and Expenses section of IIM at M*. It looks like this (if the formatting comes out right:
    Advisor Information IIM
    Company Invesco
    Domicile USA
    Fund
    Inception 02/26/1993
    Fund Advisor Invesco Advisers
    Phone 800-847-2424
    Website http://www.invesco.com/portal/site/us/template.PAGE/products/closedend/fundOverview/?fundId=30291
    Address Invesco Ltd,

    Fees and Expenses IIM
    Total Expense Ratio Reported 1.28%
    Interest Expense 0.33%
    Top 3 Expenses
    Advisor Fee 0.67%
    Administration Fee 0.02%
    Director Fee 0.00%
    Total Expense Ratio Adjusted 0.52%

    So what is the actual Expense Ratio that one pays for owning this fund? Is it in fact 0.52%? Thanks

    Reply
    • December 31, 2015 at 11:22 pm
      Permalink

      Rich, it is the higher number and then you also pay the interest expense on the margin used. Most CEFs use 30-40% leverage and the four muni funds I use are no exception.

      Reply

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