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!

Monday Trades 24OCT2016

Never miss another opportunity to devour prey!

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