I have been assigned on my puts in ON.
music selection: “How Could I Forget” — The Faint
Back on 22JAN2018, I sold puts in ON Semiconductor (ON). It looked like a good trade before the broad market correction began. Shares have tanked since that and now trade around 20 a share. I was assigned today at the 25 strike.
I have not triggered a stop loss in this trade so I’m writing covered calls to earn a little income on what would otherwise be ‘dead money’ for me while I wait for the market to shake off the correction. I sold ON180316C0002500 for 10 cents a share. The trade will be in force for 36 days and yields 4.06% annualized. It doesn’t look like much compared to recent options returns but it beats being parked in 10 year Treasurys by a mile.
On just the underlying, I’m down about 20%. However, after accounting for options premiums collected on ON so far, I’m only down 11.76%. My stop loss is currently at 17.61 a share. I will close the trade if the stock finishes a day below that mark. Never enter your stops into the market. You wouldn’t play poker with your cards showing.
Devour your prey raptors!