Roll Friday Expiries: AFSI, SM, SIRI

I had three positions expire and Friday.

music selection:  “Love Removal Machine” — The Cult

weigh-in:  214.2 (1.2)

AFSI was originally assigned on 24APR2017.  I have already written covered calls against the position twice.  Today, I wrote a third covered call.  Shares are down 31% so I had to go pretty far out to find liquidity at the original 17.5 strike.  I sold AFSI170915C00017500 for 25 cents a share.  The trade will be in force for 117 days and yields 4.46% annualized.  I’m using a larger than normal 35% trailing stop loss which would trigger at 9.67.

SM Energy (SM) was assigned over the weekend at the 22.5 strike. Oil is creeping up again so I see a good chance of this one getting called away on the new position.  I sold SM170616C00022500 for 60 cents a share.  The trade will be in force for 26 days and yields 37.44% annualized.

Sirius XM (SIRI) was also assigned over the weekend at the 5 strike.  I sold SIRI170630C00005000 for 12 cents a share.  The trade will be in force for 40 days and  yields 21.90% annualized.  I expect to play SIRI for a long time rolling in and out of puts and calls as appropriate to collect premium.

The three positions have a simple average annualized return of 21.26%.  Even after 25% short term capital gains tax, this return is highly likely to beat the long term results of indexing to the S&P.

Devour your prey raptors!