music selection: “Victim Of Illusion” — Michael Schenker
weigh-in: 221.4 (0.2)
I’ll start with an update on the closed positions. A bear put spread in M and a bull call spread in CERN finished in the money. The M spread earned $360 on 1,440 at risk over 40 days. That is good for 25% or 228% annualized. The CERN spread earned $126 on 1,624 at risk over 26 days. That is good for 8% or 109% anualized.
I have a new bond position. I have had a good till canceled order open for Flour Corp (FLR) – CUSIP: 343412AC6 for some time. It filled this morning. The bond was trading over par before the COVID pandemic. The company has only trivial net debt and room on its line of credit. I consider this bond to be money-good. It will earn 6.69% to maturity at 15DEC2024 if held to maturity. If it returns to par before then, I will cash out for higher returns.
Wells Fargo (WFC) is on the best banks out there on the strength of having very low cost of capital. It has been scandal plagued but appears to finally be turning a governance corner. The stock has been dead money since March. I’m writing a near the money put to capitalize. I sold 4 contracts of WFC201120P00022500 for 1.15 a share. The trade will be in force for about 61 days. It enjoys 5.58% downside protection and will earn an expected 30.58% annualized.
Finally, I am going back to Comcast (CMCSA) for a bull call spread. America’s most hated company hits its numbers essentially every quarter. I think it is a great investment. I bought 12 spreads at 40/42.5 call strikes and 16OCT2020 expiry. I paid 2.00 a share on the spreads. The trade will be in force for about 26 days and is set to earn 25% or 351% annualized. It enjoys 4.82% downside protection before profits are threatened.
Devour your prey raptors!