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.