I wrote puts on AbbVie Inc. (ABBV) last Monday.

music selection:  “I Just Want To Be Your Everything” — The Bee Gees

I introduced AbbVie as a put writing candidate in part one of the eight part series.  It is a strong pharmaceutical company with leading drugs and a well stocked pipeline.  It was recently beaten up a little when the FDA approved a biosimilar drug from a competitor but has since recovered nicely.

I sold the 11MAR2016 expiry 48 strike puts (no Yahoo link, feed hasn’t picked up).  I went out of the money to pick up additional downside protection.  Like I’ve said before, the current market is guilty until proven innocent.  I received 65 cents a contract in premium.  The trade will be in force for 40 days and yields 12.36% annualized.  Not too shabby.  The trade has an impressive 10.76% downside protection versus the spot price of 53.06 at the time the contracts were written.  The spot price has since climbed, giving me even more protection from assignment.  I should do well here.  And in the unlikely event I do get assigned, I’ll own a fantastic business at a favorable price.

There aren’t any more new trades to discuss as I’ve run out of invest-able capital.  So I will continue with the eight part series on Friday.  I then have five positions expiring on the 19th.  I will detail what I do with the freed up capital thereafter.

Devour your prey raptors!

Write puts AbbVie Inc. (ABBV)

Never miss another opportunity to devour prey!

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4 thoughts on “Write puts AbbVie Inc. (ABBV)

  • February 10, 2016 at 7:21 pm
    Permalink

    Hey,
    Thx for sharing your trades. I is great to read trades from other people out there. How do they think, what is important for them.
    I am exploring options myself, so far, I like it. January is shaking up some of my positions, a great learning experience.
    AT

    Reply
  • February 11, 2016 at 7:34 am
    Permalink

    I think the strike price of 28 is incorrect and 48 is the correct strike price. There is a 81% that your put will be worthless at expiration based on current implied volatility of 33.4.

    Thanks for sharing your trades.

    Reply

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