Seven positions expired over the weekend.
music selection: “Misty Mountain Hop” — Led Zeppelin
weigh-in: 195.8 (2.8)
I have six covered call trades today and two written puts. I wrote a total of 1,260 in premiums today. That was mostly for August expiries so August option income is now projected to come it at 2,029.
First is a covered call in BrightHouse Financial (BHF). This is a position that has disappointed and threatens to stop out on a 25% trailing stop loss. I sold BHF180817C00050000 for 10 cents a share. The expected annualized return is a mere 2.81%. The trade will be in force for 26 days.
Scott’s Miracle Grow (SMG) is a position with a lot of potential. The company is poised to dominate the indoor agriculture and recreational marijuana market by extension. Shares have failed to impress since getting assigned some months ago. Today, I sold SMG180817C00090000 for 55 cents a share. The expected annualized return is 8.58%. I am hopeful this one will still turn in a favorable quarter and recover. The trade will be in force for 26 days.
ON Semiconductor (ON) is fairing much better. I was narrowly assigned over the weekend after finishing a few pennies in the money. I sold ON180817C00025000 for 53 cents a share. The expected annualized return on this trade is an impressive 29.76%. I expect to step in and out of this trade for however long it offers fat premiums. The trade will be in force for 26 days.
Match Group (MTCH) took a tumble some month’s ago when Facebook declared its intention to compete with the firm. Shares have recovered somewhat since but are still down. I sold MTCH180817C00046000 for 29 cents a share. The expected annualized return from that trade is 8.85%. The trade will be in force for 26 days.
Macquarie Infrastructure (MIC) was called away with a nice capital gain as the previous covered call was well out of the money. I’m going back with a written put and to that end sold MIC180817C00045000 for 1.85 a share. The expected annualized return is the best of today’s trades at an astounding 57.71%. The trade will be in force for 26 days.
My short position in AMCX stopped out and I am replacing it with a written put in AbbVie (ABBV). I sold ABBV180831P00090000 for 3.60 a share. The expected annualized return is impressive at 36.50%. The trade will be in force for 40 days.
It is time to roll my Skyworks diagonal call again. The trade is down 22.62% against my cost basis and is threatening to stop out. I sold SWKS180831C00108000 for 15 cents a share. The expected annualized return against my cost basis of 63.70 is 2.15%. Not encouraging. The trade will be in force for 40 days.
Finally, Venator Materials (VNTR) stumbled and is trading well below what I consider intrinsic value. Raptors who do not yet have a position might consider entering the trade at the 15 strike. I sold VNTR180921C00017500 for 15 cents a share. The trade will be in force for 61 days and yields an unappetizing expected annualized yield of 5.13%.
I did something a little unusual and bought a new long position without adding an options leg. The position is CSI Compressco (CCLP). The thesis is that the share price has fallen substantially while the market for the company’s bonds has held strong. This is a powerful indicator that the stock might double in the next 18 to 24 months. If I’m wrong and the stock trades sideways or even slightly down, I get paid 12.08% annually to wait from the MLP distribution. This also replaces some lost passive income from MIC being called away and leaves me with interest, dividends, and distribution income sufficient to cover 111.18% of my 25,000 annual budget. Not too shabby.
Devour your prey raptors!