I sold puts on AT&T today.

music selection: “Fixed” — Stars

I originally planned to not write any more puts until some positions expired.  But I had some small positions in junior gold miners I picked up at year end hoping that the decline in price was tax loss harvesting and the price would rebound in early February.  That play worked as planned and I took my profit on Thursday, freeing up about 13,000 in invest-able capital.  I deployed that in three 36 strike T puts, putting 10,800 at risk.

This trade is a little different than recent written puts where I have been going out of the money for additional downside protection.  I very much want to get assigned here so I can collect the 5% yield while writing out of the money covered calls waiting for price appreciation.  I expect 4% dividend raises yearly for quite some time.  I also expect at a hard to predict time in the future a big uptick in business.  AT&T has the most fiber optic cable in the United States.  It was able to deploy cable cheaply by running along telephone poles instead of having to bury line.  As the Internet of Things becomes a reality, Americans will use increasingly more data.  AT&T will reap rewards as copper will not be up to the task and it will take competitors many years and billions of dollars to lay competing infrastructure.

Anyway, I sold T160318P00036000 for 80 cents a contract.  The trade will be in force for 36 days and yields 22.53% annualized.  Downside protection is minimal but that is by design as I am desire assignment in this case.  If more capital comes available, I may strangle this after assignment to continue building the position.

Devour your prey raptors!

Write puts AT&T, Inc. (T)

Never miss another opportunity to devour prey!

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3 thoughts on “Write puts AT&T, Inc. (T)

  • February 13, 2016 at 3:57 pm
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    Raptor,

    I recently was on the opposite page, buying a $50 put on VZ that I quickly closed out of. These two companies have been heading straight up in recent weeks. Oddly enough REITs have been destroyed despite the 10 year note trading at 4 year lows. Strange…anyway I just posted my closed option trades for the year.

    Keep devouring!

    MDP

    Reply
    • February 13, 2016 at 4:24 pm
      Permalink

      I find it interesting that you are buying options rather than selling them. The only place I have enough conviction that the movement will be sufficient to compensate me for purchased time value is on UVXY. Do you have any idea what your win percentage is?

      Reply
  • February 13, 2016 at 6:25 pm
    Permalink

    Raptor,

    I won pretty big buying CAT, WMT, and BP calls at the beginning of the year. I also have done well buying BP $29 calls and then selling $32 BP covered calls. Also until recently selling XOM $79 and $80 calls have worked for a few months. I may lose my XOM shares this month. So far I haven’t lost any covered calls. I have also been a bit more speculative recently buying LNKD calls.

    As far as my winning percentage goes I have put up $10200 and received $12000. With that said I still have a few open positions with CSCO being in the red. I bought Jan 17 $27 calls at the beginning of the year. I was way down, but the recent dividend bump and guidance is getting me back closer to even.

    You can click on my link for today’s YTD summary.

    MDP

    Reply

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