This trade has been open 124 days.
music selection: “Behind The Wall Of Sleep” — The Smithereens
First a little cleanup. I have been working to gracefully close my calendar spreads as they were performing, on average, around break even – with a lot of volatility, while tying up capital. My last calendar in TOT closed today. I originally purchased the 55 strike Dec/Feb calendar in TOT for 1.05 a share on 28OCT2019. I closed today for 1.10. The trade was in force for 46 days and yielded about 5% or 41% annualized.
I intend to open two new net debit spreads per week each Monday (one bullish, one bearish.) At the same time, I am closing my old covered call trades when I can get out at break even or better. Five such trades are still open and two appear “likely” to close with shares called away at my entry price or better on the 20th. A third is a maybe for closing the 20th. The other two may be tying up capital for some time. I keep the rest of my portfolio in individual distressed bonds or in closed end funds. My most recent CEF purchase was JQC. I’m updating that today.
Nuveen Credit Strategies Income Fund (JQC) is a closed end fund that is invested in a mix of preferred shares, fixed income, and convertible debt. It trades at a 7.79% discount to NAV and yields 16.65% annually. I originally purchased the fund on 12AUG2019 for 7.67 a share. I may have over paid a little as share price has declined a few percent since then. Current price is 7.46 a share or a 2.74% decrease over 124 days. I have collected 52 cents in distributions bringing my net return to 4.01% or 11.84% annualized. This is a little disappointing as I was targeting 12% annualized here. It is still performing well for debt rather than equity and should hold up well in the event of a market crash. I have no plans to sell at this time.
Devour your prey raptors!