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!
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.
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
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.