CTL was called away over the weekend.
music selection: “Tall Cool One” — Robert Plant
weigh-in: 196.6 (1.2)
I originally purchased 600 shares of CTL for 17.38 on 16APR2018. I wrote covered calls at the 19 strike twice. On Saturday, shares were called away. I earned 1,206 on 10,428 in capital at risk over 81 days for an annualized return of 52.12%.
I’d like to get reassigned shares so I’m writing an in the money put today. I sold CTL180817P00020000 for 78 cents a share. The trade will be in force for 40 days and yields an expected 35.59% annualized while enjoying 3.37% downside protection. The intent of this trade is to get assigned and write calls at the 21 strike or higher.
I regularly monitor a basket of property and casualty insurers with a history of strong underwriting. These companies can be powerful compounders of wealth when purchased at an attractive price. Currently AXIS Capital Holdings Limited (AXS) fits the bill. It sells for a discount to its float and has a decades long history of strong underwriting. It is a little beaten up after taking some losses on the three hurricanes last year but should rebound nicely. I expect anyone who buys at today’s price to compound their wealth at 12-15% a year for decades. I already have a full position however and will not be adding more.
Devour your prey raptors!