On May 1st, 2019, I made the following put sell - PEI MAY 17'19 6 Put @0.20
This is already the eleventh (#11) put sell from my short options trader career. For now, it seems I've found my way in options trading - I'm selling puts against (high) dividend paying stocks I already own or I would like to have.
PEI is a stock I would like to have in our children portfolio. Made this trade willing to take PEI at a lower price.
PEI currently is trading at $6.04 and has a yearly dividend payout of $0.84 giving a yield of 13.9%. Dividends are paid quarterly in the following months - Mar, Jun, Sept, and Dec. In case I will be assigned PEI stock before options expiry I will have 100 shares paying me dividends and giving a nice boost in those months. Awesome.
Got for this trade a premium of $20, but I will be obligated to buy 100 shares of PEI if the price will drop below $6 USD per share by May 17, 2019.
Break-even price: $5.80
This latest trade gives 66.92 % yield annually
In case I will be obligated to buy this stock, I already have collected premium, and my real buying price will be $5.80 or just $580 for 100 shares of PEI with an annualized dividend at $0.84 that's a very high 14.4% dividend yield.