Two positions expired over the weekend.
music selection: “Fortunate Son” — Creedence Clearwater Revival
weigh-in: 195.4 (1.4)
I have been trying to write a covered call on Brighthouse Financial for some time. Shares fell shortly after I was assigned and it hasn’t been worth the trouble to write a call at my entry strike. Today, I sold BHF181116C00055000 for 15 cents a share. It provides only 2.12% annualized return over 47 days but gives me a tiny bit more downside protection while I wait for the price to recover.
CenturyLink (CTL) was assigned over the weekend. This was as intended as I want to write covered calls while I wait to collect the underlying distribution of over 10%. I sold CTL181109C00023500 for 22 cents a share. The trade will be in force for 40 days and yields an expected 8.54% annualized. I remain eligible to collect the dividend.
Finally, I have a covered put position in Ford (F). This is a short position in the underlying used to anchor writing a put for income to offset the dividend that must be paid to the lender and borrowing fees. Ford is one of my poster children for irresponsible subprime lending. Their sales are heavily dependent on loaning money to people who can’t pay it back. When the credit cycle turns, they will suffer mightily. I sold an additional 43 shares at 9.41 to bring my total to 500 shares. I also sold five units of F181109P00009000 for 22 cents a share. That trade yields an expected 19.26% annualized over 40 days. More than enough to cover the dividend yield and borrowing costs and even provide a little cash profit while I wait for capital gains from a declining share price.
Devour your prey raptors!