I am opening a Buy/Write on Genesis Energy (GEL).
music selection: “One Week” — Barenaked Ladies
weigh-in: 219.2 +0.8 (doh!)
Genesis Energy is a midstream oil and gas MLP that has remained strong through the oil downturn. It has increased its distribution every single quarter going back to 2005. It yields 7% or so at today’s price. I expect to do well here and am excited that options are offered allowing me to juice returns with covered calls while I collect a growing dividend payment.
I bought shares today at 37.64. I also sold GEL160715C00040000 against the position for 58 cents a share. The trade will be in force for 33 days and yields 17.04% against my cost basis in shares. The trade enjoys 1.54% downside protection. Next dividend should go ex in late July so I shouldn’t get called away early by those looking to cash the distribution. This position replaces AT&T which was called away after a late rally on Friday.
Devour your prey raptors!