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Strategies & Market Trends : Option Strategies
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To: robert b furman who wrote (1952)10/6/2018 12:03:14 PM
From: robert b furman1 Recommendation

Recommended By
Thehammer

  Read Replies (2) of 2591
 
OK with this slide down last week I'm trying to reaccumulate my position in CY.

I had previously sold it when CY popped up to the 18's after they announced their earnings.

That day I sold all of my CY and swapped it out for an equal amount in KMI which pays an 80 cent dividend vs CY's 44 cent dividend.

So here's a trade I made yesterday:

Yesterday I sold 25 $13.00 puts for an average of $1.83. They expire on January 17th 2020.

If assigned to me they will have a net purchase price of $11.17. Assuming the dividend stays the same it would yield 3.94%.

If they expire to 00.00 - I'll just keep the $4587.04.

Since it was held for over 12 months I'll be able to pay capital gains on the transaction.

The premium of $4587.04/25 = 1.83/11.17 = 16.383% held over 15 months = 13.11% on annualized basis.

In a fit of unusual luck I sold my CY on the day they announced earnings and had a pop up into the 18's.

So I'm beginning to accumulate the shares back at a little lower price than I had them before at (11.37).

I think CY has a good product portfolio and may well benefit from this China secret chip event.

The rearrangement of the supply channels should benefit CY (a american chip maker) in the future.

The automotive business is growing and the I of T is particularly good as well.

Hope this helps.

Best of trades to all.

Bob
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