I rolled forward some trades from my Friday expiries.
music selection: “Centuries” — Fall Out Boy
weigh-in: 211.4 (2.4) – w00T!
I sold BSM160916P00015000 for 30 cents a share. Blackstone Minerals is an MLP that I have covered earlier. It is a well run business yielding over 7 percent. My trade yields a strong 28.08% on an annualized basis over 26 days and comes with 5.89% downside protection.
I sold covered calls on Genesis Energy, another MLP yielding over 7%. I sold GEL160916C00037500 for 50 cents a share. The trade will be in force for 26 days and yields 18.72% on an annualized basis.
I’m back with more PennyMac. This one is a REIT that is a hedge fund favorite. I sold PMT160916P00015000 for 25 cents a share. The trade will be in force for 26 days and yields a very strong 23.40% annually while enjoying 2.32% downside protection. I will be delighted if I get assigned and can begin collecting the 12% distribution while writing covered calls for extra income.
I topped of a position in Prospect Capital. This one is a Business Development Company (BDC) that yields over 11%. It is a little harder to get filled at an attractive price on this one but the market shined favor upon me today. I sold PSEC160916P00008000 for 10 cents a share. The trade will be in force for 26 days and yields 17.55% annually while sporting 5.5% downside protection.
I have to make a correction on Seadrill Partners (SDLP). I thought I had puts that were due to be exercised on Friday but it turns out that limit order never cleared. My records were incorrect. So I’m trying to get into a buy/write covered call setup. I bought 1300 shares of SDLP at 3.74 this morning. I have a 10.53% yield at that cost basis. I was not about to get filled on a limit for front month covered calls. I’ll go out another month tomorrow and try again.
My shares of SunCoke Energy Partners (SXCP) were called away over the weekend. I still like the stock at the current valuation (and 18% yield!) So, I have written some cash secured puts to try to get back in at an attractive price. I sold SXCP160916P00012500 for 70 cents a share. That trade will be in force for 26 days and [brace yourselves] yields 78.62% on an annualized basis while enjoying 4.68% downside protection. This is a volatile stock that demands fat premiums. I think the market is misassessing the risk involved here by lumping metallurgical coal in with thermal coal. I expect to play this one for quite some time.
I also had a new limit order out today for Mid-America Apartment Communities. This is a REIT that plays in the Mezzanine level apartment space. It is neither slums nor luxury apartments but right in the middle where the average Joe lives. It yields about 3 and 1/2 percent but should be able to grow distributions for years to come. I was not able to get filled at my minimum required yield and will try again tomorrow.
Devour your prey raptors!