23 December, 2019 seen 48On August 29, 2019, I sold the following covered call - PEI SEP 20'19 5 @0.2. I entered this trade for a speculative reason and to learn a new technique - capturing a dividend This was already sixty-fifth (#65) options trade from my short options trader career. For now, it seems I've found my way in options trading - I'm selling puts against (high)…
On May 17th, 2019, I made the following put sell - PEI JUN 21'19 7 Put @0.35
This is already the sixteen (#16) 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 we have in our child portfolio.
PEI currently is trading at $7.31 and has a yearly dividend payout of $0.84 giving a yield of 11.49%. 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 $35, but I will be obligated to buy 100 shares of PEI if the price will drop below $7 USD per share by Jun 21, 2019.
Break-even price: $6.65
This latest trade gives 48.57% yield annually
In case I will be obligated to buy this stock, I already have collected premium, and my real buying price will be $6.65 or just $665 for 100 shares of PEI with an annualized dividend at $0.84 that's a very high 12.63% dividend yield.