Multiple trades this week.
music selection: “Train, Train” — Blackfoot
weigh-in: “Train, Train” — Blackfoot
A covered call in FLO expired out of the money over the weekend. I originally bought FLO for 22.40 a share on 19FEB2021 (400 shares). I sold this morning for 23.70. The gain was 5.83% or 522 dollars over 31 days which is good for 69% annualized. This was done to raise cash for better yielding investments as I seek to build out a portfolio that covers my budget passively while still allowing for trading spreads around the periphery.
Fourteen hundred shares of PSEC were called away over the weekend at 7 dollars. I originally purchased PSEC at 6.65 on 28MAR2018. My gain was 490 dollars over 1,089 days, good for 2% annualized. I collected near 9% annually in the underlying distribution plus some covered call premium along the way. It was a good stable income investment. I decided to re-enter the trade at the 8 strike. I sold 13 puts with the 16APR2021 expiry for 45 cents apiece. The trade will be in force for 26 days and yields 78.97% annualized. These puts are in the money and almost certain to be assigned. I will write covered calls for income while I collect the underlying distribution.
Finally, I opened a bear put spread in West Pharmaceutical Services (WST) on the 16APR2021 expiry and the 300/310 strikes. The underlying was trading at 280.55 at the time, providing downside protection of 6.93% before profits are threatened. WST is a Dividend Aristocrat with 28 consecutive years of dividend increases. It has a 20 billion market cap and a Beta below 1, making it a good candidate for an in the money spread. The chart has been consolidating with sideways movement year to date and I like my chances. The trade will be in force about 26 days and should downside protection not be breached, I will earn 460 dollars on 4,540 capital at risk. That is good for a 10.1% return or 142% annualized.
March is currently shaping up to see a little over 9,000 in closed trading profits. June is coming in even better with three spreads in the money. May is a wildcard that I won’t know how is going to shake out until I populate it with trades over the coming weeks.
Devour your prey raptors!