JQC was slowly losing me money.

music selection:  “Chainbreaker” — Primal Fear

I sold JQC at 6.11 (my entry prices were between 7.65 and 7.67).   The CEF had a high yield but the NAV deterioration was eating that up plus some.  I was down including distributions about $1,200.  To replace most of the yield, I bought 3700 shares of Annaly (NLY) at 7.52 each.  I already held 37 short puts at the 7 strike.  I added 37 short (covered) calls at the 8 strike and 20NOV2020 expiry at a price of .09 cents a share.

The trade will be in force for 66 days and  yields an expected 6.13% annualized.  The underlying pays a little over 11% so my composite yield on the long shares is above 17%.  This covers the yield from the sold shares of JQC.

I am now playing both ends against the middle on NLY.  If the price falls, I dollar cost average in more shares.  If they rise, I book a capital gain and get paid to wait.

Devour your prey raptors!

Sharing is caring!

Sold JQC – Converted NLY to strangle

Never miss another opportunity to devour prey!

2 thoughts on “Sold JQC – Converted NLY to strangle

  • September 22, 2020 at 8:43 pm
    Permalink

    Was the collar costless or near costless?

    Reply
    • September 22, 2020 at 9:06 pm
      Permalink

      I am short both a put and a call. I took a net credit for each and a debit to buy shares to secure the short call as covered. That is I converted a short put position to a “strangle” and not a “collar”

      Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

*

This site uses Akismet to reduce spam. Learn how your comment data is processed.