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!