On May 7th, 2019, I made the following put sell - PEI JUN 21'19 8 Put @0.75

This is already the thirteen (#13) 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. 

PEI currently is trading at $7.23 and has a yearly dividend payout of $0.84  giving a yield of 11.6%. 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 $75, but I will be obligated to buy 100 shares of PEI if the price will drop below $8 USD per share by Jun 21, 2019. 

Break-even price: $7.25

This latest trade gives 73.61 % yield annually

In case I will be obligated to buy this stock, I already have collected premium, and my real buying price will be $7.25 or just $725 for 100 shares of PEI with an annualized dividend at $0.84  that's a very high 11.5% dividend yield.

No matter will the option expire worthlessly or I will be assigned I will buy this stock this month to collect dividends for our children portfolio.

Get the latest dividend & options income article in your inbox

Join more than 170 subscribers and get notified once the newest dividend income and options income article is is out. Sign up now and you will get ~ 2 e-mails per month
* indicates required

You can unsubscribe at any time by clicking the link in the footer of our emails. For information about our privacy practices, please visit Privacy policy