I continue to position defensively.

music selection:  “In The Middle Of The Night” — Within Temptation

weigh-in:  213.6 (0.2)

A short put in American Express (AXP) expired out of the money over the weekend.  I earned 415 dollars on 10,000 at risk over 40 days.  Shares are a little pricey so I’m not renewing the trade.  In other position management news, the bear put spread I have in Colgate Palmolive (CL) is threatened.  If the position expired now, I would book a 90 dollar loss (about 2%).  Closing at the current bid ask would result in booking a loss of about 900 dollars so I’m going to hold for a few days and see if price action goes my way.  The position expires this weekend.

This week’s new position is a bear put spread in SWK.  The maker of small power tools is well known.  It has a mature business that gushes free cash flow and is a Dividend Aristocrat with 52 consecutive  years of distribution raises.  It is unlikely to go on a 20% rally over the next 33 days and makes a good target for a bear put spread.

I bought the 195/200 strike spread with 18DEC2020 expiry for an average price of 4.0933 per share.  I picked up 9 spreads putting 3,684 in capital at risk over 33 days.  The spread enjoys 5.83% downside protection before profits are threatened.  Should that not be breached, I will earn 816 in profits. That is about 22% or 245% annualized.

Devour your prey raptors!

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Bear Put Spread Stanley Black & Decker (SWK) With Yield Up To 245%

Never miss another opportunity to devour prey!

5 thoughts on “Bear Put Spread Stanley Black & Decker (SWK) With Yield Up To 245%

  • November 18, 2020 at 7:23 pm
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    Financial Velociraptor, I love your blog! Congrats on your early retirement and love to see you putting your brain to use on day trading. That return is insane! Keep up the great work!

    Reply
    • November 19, 2020 at 11:33 pm
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      Fresh Life Advice,

      Thanks for reading! I’ll check out your blog after I finish an update on bonds.

      Reply
  • November 19, 2020 at 7:07 pm
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    The trend line for SWK suggests this will be a close call. What’s the rationale for SWK to decline or flatten?

    Reply
    • November 19, 2020 at 11:34 pm
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      There isn’t one. I’m just spitballing at dividend aristocrats with in the money spreads. CL is upside down with one day to trade. DOV is also going to be close.

      Reply
  • November 20, 2020 at 7:29 pm
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    Check out WBA , an aristocrat that’s been hammered lately, good dividend and pays good premium.. maybe be for a bull spread?

    Reply

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