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!

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

    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!

    • November 19, 2020 at 11:33 pm

      Fresh Life Advice,

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

  • November 19, 2020 at 7:07 pm

    The trend line for SWK suggests this will be a close call. What’s the rationale for SWK to decline or flatten?

    • November 19, 2020 at 11:34 pm

      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.

  • November 20, 2020 at 7:29 pm

    Check out WBA , an aristocrat that’s been hammered lately, good dividend and pays good premium.. maybe be for a bull spread?


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