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Strategies & Market Trends : Option Strategies
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To: sm1th who wrote (2574)3/13/2025 3:10:03 PM
From: robert b furman1 Recommendation

Recommended By
toccodolce

   of 2591
 
Hi Sm1th,

I just sold 10 March 21 puts on NOG (Northern Oil and Gas) strike price $28.00 for 83 cents and 10 March 21 strike price $27.00 for 40 cents.

If put to me a net prurchase price of $27.15 and $26.40.

The Board of Directors has just announced a quarterly dividend of .45 cents /1.80 annually (a 12 % increase over last year.)

If assigned, the $28.00s will yield 6.63% and the $27.00's will yield 6.77%.

The new dividend has an ex dividend of 3/28.

If they expire to 00.00, I'll keep the $1230 and hopefully buy 1000 shares of the stock near $28,000 - $1230 = $26770 or $26.77 / share. $1.80 dividend/ $26.77 = a dividend yield of 6.72%

I'm OK with either alternative.

One could assign and one go expire in the next 8 days and I'll be OK with that as well.

Better that a bank and taxed at 20% max.

This brutal decline is bumping up the premium in puts, which if assigned results in a higher than normal dividend yield.

Northern oil and gas buys participation in oil wells in all of the shale basins and gas wells in the east coast (Utica dry gas).

They do not operate the wells , so their overhead is minimal. Their commitment is to maximize the dividend. Management has a large ownership position.

I like riding on the tails of management.

Bob
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