Shares were called away early in Prospect (PSEC) and I sold another discounted bond.
music selection: “This Is It” — Kenny Loggins
Twelve contracts worth of PSEC were called away last night, leaving me with two contracts. Shares went for 8.00 and had been purchased at 7.87 for a buy/write strategy. Those shares were in force for 37 days and yielded 22.20% annualized. I have replaced the exposure with written puts. I sold PSEC160916P00008000 for 15 cents a share. The trade will be in force for 52 days and yields 13.16% annually. This trade may be about played out as it is attracting lower options premiums than when I originally got into it. The market seems to be saying the stock is fairly priced and is expected to trade sideways.
In discounted bond news, I sold the Avon Products bond for 90 cents on the dollar today. The trade cleared seconds after my PSEC puts from a long open good till canceled order. The bond was purchased on 15DEC2015 at 70.3 cents on the dollar. I paid 2 dollars in commissions and 32.81 accrued interest. I will update this space at the end of the trading day when I get my broker report detailing commission and interest paid. Estimated annualized return is about 40%.
*Update 6:25 PM local time* – The sale of the AVP bonds came with 4.75 paid in commissions and 47.98 paid in accrued interest. The trade was in force for 225 days and yielded 45.31% on an annualized basis.
Devour your prey raptors!