It is a pretty good day in the market for longs.
music selection: “Ghosts” — Ladytron
My old covered call on GSK expired worthless so I’m writing another. On Monday, I sold GSK160617C00043000 for 40 cents a share. The trade will be in force for 26 days and yields 13.06% annualized. I’ve cooled on the idea of having a lot of longs as the market gives me doubts at the moment. ETFs and mutual funds have seen months of outflows and trading volumes have been very light for months. Prices are holding but there is no conviction behind the trading.
For now, I prefer to be in out of the money puts with some extra downside protection. GSK isn’t a good name for that as you need to be at the money to earn 12% annualized. My high withdrawal rate means I have to earn my returns today and have little room for long term payoffs. I might come back to this one when the market shows more life though.
Devour your prey raptors!