I wrote a cash secured put on Qualcomm (QCOM) on Monday.
music selection: “Shakin'” — Eddie Money
The previous written put at the 43 strike expired worthless. I have rolled down and out, targeting 12% annualized with as much downside protection as possible. The market remains guilty until proven innocent.
I sold QCOM160311P00040000 for 60 cents. The trade will be in force 40 days and yields 13.69% annualized. Versus the spot price of 44.65 at the time the contract was written, the trade has 11.76% downside protection before a loss will be realized. I feel pretty good about my chances here. I had originally put in a bid to sell two contracts but only one cleared, so I’ll settle for 60 dollars in premium instead of 120.
I remain committed to keeping a portion of my asset allocation in written puts (covered calls when assigned) as I think it offers a good ratio of risk to reward and lowers volatility on the portfolio.
Devour your prey raptors!