I rolled some options positions from Friday expiries and also sold a discounted bond.
weigh-in: 210.8 (2.2) – w00t!
music selection: “These Eyes” — Guess Who
First up is Genesis Energy LP (GEL), an MLP. Shares were assigned some months ago at 37.50. I am writing a second covered call at the 37.50 strike. I sold GEL161118C00037500 for 70 cents a share. The trade will be in force for 26 days and yields 26.21% on an annualized basis. The underlying shares yield about 7.5%.
A second covered call I am writing is Mid America Apartment Communities (MAA). I was previously assigned shares at 95.00 and am writing a 95 strike call. I sold MAA161118C00095000 for 1.00 a share. The trade will be in force for 26 days and yields 14.78% on an annualized basis. The underlying shares yield almost 4%.
Next is a cash secured put. A put in Blackstone Minerals (BSM) expired out of the money and I am replacing it with a put in CONE Midstream Partners (CNNX). I like the risk/reward proposition better here as CNNX has a much stronger balance sheet. I was able to sell CNNX161118P00020000 for 45 cents a share. The trade will be in force for 26 days and yields 31.59% on an annualized basis while enjoying 8.13% downside protection.
Finally, among options trades is PennyMac Mortgage Investment Trust (PMT). I had a cash secured put open here that was assigned on Saturday after closing 6 cents in the money. I sold PMT161118C00015000 for 40 cents a share. The trade will be in force for 26 days and yields 37.44% annually. The underlying shares yield about 12.5% if I hold through the ex-dividend period before getting called. Feel pretty good about prospects here.
I tried to sell a covered call on my shares of SDLP at the December expiry but could not get the market maker to take action. I will try again tomorrow with a further out expiry to look for more liquidity.
In other news, another discounted bond sold today. Linn Energy went into bankruptcy and has been in debtor in possession status for a couple months. It could be some time before the bonds convert to equity and I had an opportunity to sell the bonds at a nice profit when a limit order cleared. Back on 8DEC2015, I bought two units of the 15MAY2019 maturity 6.500 coupon bonds for 23 cents on the dollar. I paid 2.00 in commissions and 37.00 in accrued interest. Today, I sold the bond for 28.600 cents on the dollar. I paid 2.75 in commissions. No accrued interest was paid as the bond is in default and “trading flat”. I picked up 60.50 in coupon payments during the holding period before the bond defaulted. The trade was in force for 321 days and yields 29.79% on an annualized basis. Not bad for a trade were I was “wrong.”
Devour your prey raptors!