Monday trades.

music selection:  “In The Summertime” — Mungo Jerry

weigh-in:  200.0 n/c

First up, some housekeeping.  My diagonal call in MSFT has  moved into the money.  I’m leaving it open for now as there is still a significant amount of time value for the two weeks left.  Unless shares retreat below 115, I’ll have to put more capital into the trade.  Also my long put trade in WAGE was closed on Friday with a 420 dollar loss.  The thesis was the stock was imminently going to de-list from its exchange due to an inability to report financials to the SEC.  On Thursday the company announced an earnings date and conference calls causing shares to rally above my strike price.  I decided to cut my losses.

My bear put spread in DISCA performed very well after AT & T noted that Dish was not going to carry Discovery channel on three new bundles.  Shares fell several percent causing the value of my spread to increase.  I got out today at 2.15 because there was only a little more than half a penny a day to be earned between now and expiry.  I booked 121 in profits on 950 capital at risk or 70.21% over a scanty 7 days in force.  I rolled the position down and out.  I bought DISCA190719P00030000 for 3.63 and sold DISCA190719P00027500 for 2.08 or a net debit of 1.55 per share.  The trade will be in force for a maximum of 124 days and has a maximum value at expiry of 2.50 per share.  That would be a 61.29% return or 180% annualized.  This outcome will be achieved so long as shares fall, stay flat, or rally less than 0.99% during the holding period (I expect shares to fall further).  I  have set a 50% hard stop on the spread and will exit early if I can get 95% of the maximum value or 2.38 per share.  I might also exit early if shares tank again and the remaining time value becomes (small).

My short put in ON Semiconductor (ON) expired out of the money over the weekend.  I re-established the trade by selling ON190418P00022000f or 1.00 a share.  The trade will be in force for 32 days and yields an expected 51.85% while enjoying 3.23% downside protection against a decline in share price.

My covered call in Dolby (DLB) expired out of the money over the weekend.  I wrote a new covered call against the shares by selling DLB190418C00065000 for 1.00 a share.  That trade will be in force for 32 days and yields an expected 17.55% on an annualized basis.  In the event shares are called away, I will pick up an additional 12 cents in short term capital gains.  That would boost the annualized yield to 19.69%.

Finally, my covered cal in Macquarie (MIC) expired out of the money over the weekend.  Shares have been disappointing but I am happy to hold for the long term to collect the fat underlying distribution.  I elected to boost my return by selling MIC190517C00045000 for 15 cents a share.  That trade will be in force for 61 days and yields an expected 1.99% annualized.  Shares are unlikely to be called so I can expect to remain eligible for the underlying distribution of 9.83%.   In the unlikely event shares rally to over 45 dollars during the holding period, I will collect 1.40 in additional short term capital gains, boosting the annualized return to 21.27%.

Devour your prey raptors!

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Monday Option Trades With Yields Up to 70.21%

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