I bought a bear put spread in GPC.
music selection: “Little Dreamer” — Van Halen
weigh-in: 219.8 n/c
First a little clean up. I have a bear put spread in Nucor (NUE) that had 5 contracts (500 shares) assigned. I exercised five long puts to close out the hedge. I had 2,099 in capital at risk on those 5 spreads and earned 401 over 22 days. That is good for 19% or 317% annualized. Four spreads remain open.
Genuine Parts (GPC) is an auto parts company and a Dividend Aristocrat with 57 consecutive years of distribution increases. It is a mature company with a slow moving stock price making it a good candidate for in the money spreads. I bought 10 spreads this morning at the 100/105 strikes and 19MAR2021 expiry. I got 3.771 pricing. With the share price at 94.95, the trade enjoys 5.32% downside protection over 47 days in force. Should that protection not be breached, I will earn 1,229 on 3,771 capital at risk. That is good for 32.6% or 253% annualized.
My February is currently underwater due to a WMT spread that has moved out of the money. I haven’t hit my stop loss yet and am hopeful for a good earnings report/Christmas season to move me back in the green the day before expiry.
Devour your prey raptors!