Several positions expired over the weekend.

music selection:  “Lay Your Hands On Me” — Thompson Twins

weigh-in:  207.6 +2.0

I collected 1,543 in profits on the positions that expired over the weekend.  That includes two covered calls and three net debit spreads.  First I rolled the covered calls, which expired out of the money.  I sold ON191220C00022000 for 40 cents a share.  The trade will be in force for 61 days and  yields 10.88% on an annualized basis.  I also sold IP191220C00047500 for 25 cents a share.  That trade will be in force for 61 days and yields 3.15% on an annualized basis.  I am still trying to get fills on covered calls for CCJ and CCLP.

I opened a bull call spread on Altria (MO) today.  To do that, I boughtMO191220C00037500 for 5.76 a share. I simultaneously sold MO191220C00040000 for 8.09 a share.  The net debit on the trade (and the most I can lose) is 2.33 a share.  I have 11.50% downside protection in the trade and unless the underlying moves against me more than that in 61 days I will collect 2.50 per share in revenue at expiry. That is profit of 17 cents a share or 7% over 61 days, which is 43.7% annualized.

Similarly, I opened a bear put spread on HCA Healthcare (HCA).  This is a hospital group that is struggling with debt and difficulty maintaining revenue.  I am already up nicely on long dated puts at the 130 strike here and want to make a shorter term play into weakness.  I sold HCA191220P00130000 for 8.2833 per share and simultaneously bought HCA191220P00135000 for 11.8833 per share.  The trade will be in force for 61 days and has a net debit of 3.60 per share.  The most I can lose is 360 dollars per spread.  At the same time, there will be 500 in revenue or 140 in profit unless the underlying moves against me by more than 4.29% in the 61 days the trade is in force.  That is a 39% yield or 232% annualized.

Finally, I have a new calendar spread in Air Products (APD).  This is a mature large cap with a slow moving stock price that is ideal for calendar spreads.  I sold APD191220P00220000 for 10.6014 per share and simultaneously bought APD200117P00220000 for 12.4557 per share.  My net debit is 1.8543 per share.  The trade will be in force for about 61 days.  At the time of the short leg expiry, assuming the underlying price does not change, the long leg should still have 3.09 in time value left.  That is a profit of 1.24 per share which is 67% or 869% annualized.  This spread starts a couple percent in the money.  A move out of the money by one penny will maximize profit potential.  I’ll be monitoring the price for early exit opportunities.

Devour your prey raptors!

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Net debit spreads with yields up to 869%

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