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!

22AUG2016 Trading for Income

Never miss another opportunity to devour prey!

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