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Strategies & Market Trends : Option Strategies

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To: skinowski who wrote (1787)	9/13/2016 11:26:46 AM
From: robert b furman	Read Replies (1) of 2591

HI ski, OK its ugly out there and I have some puts expiring in the end of this week and its burning a hole in my purchasing power pocket.<smile>. I just sold 15 CLDT (Chatham Lodging trust) puts - strike price 17.50 for 75 cents - expiration March 2017. Net purchase price of $16.75. Monthly dividend of .11 x 12 = $1.32 DIV YIELD OF $1.32 / %16.75 = 7.88% Premium to net purchase price is .75 / $16.75 = 4.47% for 6 months or 8.96% annualized. This is the first buy on the 17.50's - which I had hoped would evolve ( I bot some 20.00's last month). CLDT missed by a penny last quarter and has been slapped around and down. The 4 year low of cldt is January 18 /2016 @ 16.12 and 16.13 on 6/24 of 2013 : screencast.com I hope to sell more puts at the 17.50 strike price for 1.00 and 1.35. Those will drive the dividend yield so high they most likely won't happen in assignment but if they sell it will bring about a better annualized premium to net purchase price - which really should be in the low teens vs the sub 9 % of this trade. I really want some 7 % dividend payers for the long run. Best of trades - my first monthly dividend payer ( second position) !

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