I closed a bull call spread in Costco (COST) early.
music selection: “Freaks” — Doctor Butcher
On 4MAR2021, I opened via a “fish-hook” bid on COST a bull call spread with 310/320 strikes on the 18JUN2021 expiry. I paid 4.95 a share on 10 spreads. Shares have rallied to the point I was deep in the money. I sold today for 9.289 per share. There was a little less than a penny a day (per share) to be earned by continuing to hold so I decided to exit early and take some risk off the table while booking a fat profit. I had 4,950 in capital at risk in the trade. My proceeds are 9,289 for a profit of 4,339 over 36 days. That is good for 87.7% or 889% annualized.
I am taking this an opportunity to fill out the other half of my allocation to JPS. I bought 517 shares for 9.67 each. I now have a little less than 10,000 dollars at risk in JPS. This yields 625 dollars in passive income each year (paid monthly). My passive income from dividends, distributions, and interest are now (on a forward 12 month basis) 10,885 or 50.39% of my budget. I hope to gradually increase that over time until I can meet my budget with a truly passive approach.
Devour your prey raptors!