Last week’s puts in TGT expired out of the money.
music selection: “Bezerk” — Eminem
weigh-in: 205.6 (0.8)
Target has been bucking the death of retail theme. Cash flow and same store sales are up. But shares have a long way to go to get back to a normal valuation. I’m using the opportunity of mispricing and fat volatility premiums to write puts.
I sold TGT180309P00077000 for 3.60 a share. The trade will be in force for 40 days and yields an expected 42.66% annualized while enjoying 4.48% downside protection. February and March are on pace to be record months for me for writing options for premium income. The 720 I picked up here certainly helps.
Devour your prey raptors!
Write Puts Target (TGT)
All these puts seem to leverage you extra long. Have you considered bear spreads to get a more neutral footing?
That is an interesting idea. Right now, I like being extra long as it is a roaring bull market. When the trend turns, it would make a lot of sense to keep a hedge.