Closed GLD early for a loss.

music selection:  “I’ll See You In My Dreams” — Giant

I have a couple of bond trades to report first.  With GPOR in technical default, I went ahead and closed the trade for a loss.  On 17OCT2019 I bought the 6.625 coupon bond with 1MAY2023 maturity for 73.19 cents on the dollar (9 units).  I paid 9 dollars in commissions at that time as well as 281.56 in accrued interest.  I sold yesterday for 58.50 cents on the dollar.  I paid 9 dollars in commissions.  Because of the technical default situation, the bond was “trading flat” and I recovered no accrued interest. I collected 596.34 in coupons during the holding period.  My total long term capital loss is 1,025.32 on 6,587 capital at risk over 371 days.

I replaced the bond with 8 units of the Occidental Petroleum (OXY) 2.900 coupon bond with 15AUG2024 expiry at 89 cents on the dollar.  I paid 16 dollars in commissions and fees and 45.76 in accrued interest.  The bond has a 6.15% yield to maturity but I can do better by closing early at par.  The bond traded above par just before COVID.  I like this bond because interest coverage is over 5 times and the current cash and short term investments plus an untapped credit facility cover the bonds that mature before mine and my maturity.  In addition, the company is on record with management’s plan to sell non core assets and use the proceeds to reduce debt.  This should lead to a debt rating upgrade and return to par.

Finally, there is the GLD bull call spread.  It was threatened with just 29 days left till expiry with the high strike well out of the money.  I bought the 179/181 strike spread on 15SEP2020 for 1.10 a spread (18 spreads).  I closed today for 85 cents a spread booking 450 dollar loss or 23% over 39 days.  The rest of my spreads for November expiry are all in the money with 29 days remaining.  Expected options income for the month thus falls to $4,436.  Monthly transparency will show that I bled cash as I recently paid home and auto insurance plus my real estate taxes for the school district.  I still have the county and MUD taxes to pay this year.  It looks increasingly like I will not make my budget this year.

Devour your prey raptors!

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Cutting bait on GLD bull call spread

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