I opened 10 positions today.

music selection:  “Bring Me To Heaven” — Unsun

weigh-in:  212.4 +1.2 – too much football and pizza.

A little housekeeping first.  I didn’t get to post Friday or over the weekend about my expiring positions.  AAPL, PMT, SXCP, BSM, and GEL all expired out of the money.  I am establishing new positions in all today.  AXP, PSEC, and MAA all resulted in assignment of shares.  I wrote covered calls on all today.

I sold PMT161021P00015000 for 35 cents a share today.  The trade will be in force for 33 days and yields 25.81% annualized.  The trade also enjoys 3.43% downside protection.  I’m hopeful to get assigned again as this one also has a strong dividend yield.

I also sold BSM161021P00017500 for 55 cents a share.  The trade will be in force for 33 days and yields 34.76% annualized.  Downside protection is 2.70%.  I am indifferent to assignment here.  The yield isn’t that high and the options pay very well.

Next I went one strike out of the money to leave some room for capital appreciation on GEL161021C00037500.  I sold the contracts for 15 cents a share.  The trade will be in force for 33 days and yields 4.42% annualized.  I’m near certain to collect on the 8+% yield holding this one as well.

I also sold MAA161021C00095000 for 1.00 a share.  This trade will be in force for 33 days and yields 11.64% annually.  If I don’t get called, the underlying yields another 3.5% annually.

I went a little out of the money for AAPL puts to get some downside protection.  I sold AAPL161028P00109000 for 1.72 a share.  The trade will be in force for 40 days and  yields 14.40 on an annualized basis.  I enjoy 6.54% downside protection here.  I like to keep my exposure to individual equities down to the 10,000 dollar range so I’m reaching a little bit overweight here.  That is one of the reasons I’m going out of the money to defend myself here.

I also sold AXP161028C00065500 for 1.18 a share.  This one is a little bit out of the money.  I’m trying to capture up to 50 cents in upside capital appreciation before selling.  This trade will be in force for 40 days and yields 16.57% against my cost basis.  If shares are called, the yield with capital gains included will be 23.58% annualized.

I’m already in the money on PSEC161118C00008000.  I’d like to hold on to this one and collect distributions but I’ll do fine with just options premiums as you’ll see.  The trade will be in force for 61 days and yields 18.70% on an annualized basis.

Last of the group that expired Friday is SXCP.  I’m in the money here as well because I’m eager to get reassigned.  I sold SXCP161118P00015000 for 1.40 a share.  The trade will be in force for 61 days and yields 55.85% (wow!) on an annualized basis.  The trade comes with 7.98% downside protection.

A little different than the above trades are two trades where I’m trying to exit positions at a loss to engage in some tax loss harvesting.  Each of these two names has just one expiry left before year end.  If I can’t get called away, I’ll sell the underlying in late December.

I sold HCLP161021C00015000 for 1.10 a share.  The implied yield is 81.11% annualized over 33 days.  This will result in a 15.00 per share capital loss though.

I also sold CLNE161216C00005000 for 10 cents a share.  The implied yield is 8.20% annualized over 89 days.  This would result in a capital loss of 5 dollars a share.

Devour your prey raptors!

Option Trades 19SEP2016

Never miss another opportunity to devour prey!

3 thoughts on “Option Trades 19SEP2016

  • September 27, 2016 at 6:48 pm

    I’d like to hear more about how you evaluate opportunities in consideration of:

    -bid-ask spreads
    -potential market volatility (you seem to be short volatility) and the possibility of massive Enron-style downsides.
    -options pricing models vs. research and intuition

    Finally, how do you manage the stress of making a living as an options writer!?

    • September 28, 2016 at 2:11 am

      Those are good article ideas. I’ll take it under advisement. But stress? I sleep well at night.

  • October 6, 2016 at 4:25 am

    I like how you link to the option on Yahoo. It’s a nice touch. I’m going to start adding something like this as well.


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