Sold covered calls against two positions.

music selection:  “Listen To The Music” — The Doobie Brothers

weigh-in:  196.2 (0.8)

Options income is down greatly as I have given up a lot of the asset base I write positions against due to getting hammered while overly leveraged.  I do have a couple positions that have moved into a range where I can write covered calls again.  Those are Prospect Capital (PSEC) and Enterprise Products (EPD).

EPD took a dive shortly after I wrote puts against it.  I was assigned and saw shares test my stop loss but ultimately stay just above it.  I’m now writing covered calls for some bonus income, over and above the fat distribution of 7.14% while I wait for the price to recover.  To that end, I sold EPD190215C00029000 for 11 cents a share.  The trade will be in force for 40 days and yields an expected 3.46% on an annual basis.  The CBOE has a delta of 14.7% on that series so I will likely retain my shares and be able to write for additional income in 40 days.

I have held Prospect Capital (PSEC) for quite some time.  When I first entered the position, it was paying attractive premiums.  I was more drawn by the 10%+ underlying yield.  I was happy to write covered calls above my entry point for a few extra bonus percent of income.  Lately, it hasn’t even been worthwhile to write calls at my entry price of 7.  Shares have rallied lately and I finally got in a price I’m willing to risk getting called away.  So I sold PSEC190215C00007000 for 9 cents a share.  The trade will be in force for 40 days and yields an estimated 11.73% annualized.

I’ll be looking to exit ON Semiconductor (ON) with a covered call that has moved into the money.  I might keep some of that exposure by writing new puts on a smaller position size and apply the rest of the cash towards a diagonal call in Microsoft (MSFT).  I’ll check prices when the opportunity arises.

Devour your prey raptors!

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Monday Trades – PSEC, EPD

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